The occurrence of trends in cryptocurrency by means of a price analysis
The world of cryptocurrency has exploded in recent years, and prices have fluctuated wildly and unpredictable. While many investors come to the latest hot tokens or projects based on noise, you can take a more refined approach by analyzing the price. One effective technique for detecting trends is the analysis of the price, a method including identification of patterns and trends in the price of cryptocurrency price using the chart tools.
What is a price analysis?
The analysis of the price is a methodology used to analyze the price of cryptocurrencies without relying on technical indicators or charts. He focuses on the actual prices of coins trading, analyzing the relationship between them and their own prices. Looking at these patterns, you can get insight into market moods, trends and potential investment opportunities.
Why use the price analysis?
Analysis of the price campaign offers several advantages in the field of traditional technical analysis:
- Less dependence on the charts
: The technical indicators are as good as the data that create them. However, price analysis is less dependent on charts and charts.
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- Improved risk management : by analyzing pricing patterns, you can identify potential risk or possibilities on the market and make more conscious decisions.
Basic steps to conduct a price analysis
To start the price analysis, follow these basic steps:
- Collect data : Collect historical data on cryptocurrency prices for a sufficient number of coins.
- Price of coin : Use the software for charts (e.g. TradingView) to delete the prices of all coins involved in the analysis.
- identify trends : Look for designs such as:
* Growing or falling trends
* Reversal and breaks
* Pushing or bears of shoots move
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* Commercial ranges between coins
* Mutual levels of support or resistance
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- Look for correlation : Check that the price of one coin is correlated with the price of another coin.
- Monitor average movable and Bollinger bands : Use these technical indicators to assess the strength and variability of various coins.
Trend detection techniques
Several techniques can be used to detect trends at cryptocurrency prices using a price analysis:
- candle patterns : Identify specific candle patterns, such as hammer formations or shooting ranges, which often indicate a potential change of trend.
- Volume analysis : examine the size of transactions and transactions for each coin, looking for signs of increased purchase or sales pressure.
- Horizers of support and resistance : Identify the levels in which the coins have historically affected or dropped, indicating areas of support or resistance.
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Tips for using the price analysis
To maximize the effectiveness of price analysis:
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