Technical Analysis and Metrics Guide Crypto Traders Through Volatile Markets
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Technical analysis involves studying price movements and patterns to predict future market behavior. Its origins trace back to the 17th century, but modern crypto technical analysis stems from the early 20th century ideas of Charles Dow.
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Common technical analysis terms used in crypto trading include candlestick charts, volume, support/resistance levels, trend lines, oscillators like RSI, and chart patterns like Head and Shoulders.
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The Bitcoin NVT ratio compares Bitcoin's market cap to its daily transaction volume to assess if it's over or undervalued. The Fear and Greed index measures overall market sentiment.
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Strategies like day trading and swing trading are popular in crypto's volatile markets. Other key metrics are market cap, satoshis, and tokenomics.
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Technical indicators like Bollinger Bands, MACD, Stochastic, and Fibonacci Retracements aim to identify trends, reversals, price targets, and overbought/oversold conditions.