Basic trader tools (Part 6)
Technical analysis of cryptocurrencies
Technical analysis (TA) is used to analyze the history of the market and predict changes in the value of assets in the future. This is especially important in the volatile cryptocurrency market.
Technical analysis is based on three main indicators of charts:
- Support and resistance levels
- Indicator showing the strength of the RSI trend
- Chart shapes
Trend lines are straight lines connecting the extreme points of the value of a digital currency. A gap is created at the intersection of these two lines, where bulls and bears fight to determine the further movement of value. Each time it reaches a certain peak or dip, the price will go up or in the opposite direction, or the trend will increase or decrease.
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