Crypto Trader’s Guide to Supply and Demand Trading | And More in This Weeks Crypto Update.
- QNT Price Analysis: Further Consolidation Likely Around $100 BRN
- Ripple Showing Rising Relative Strength
- Crypto Trader’s Guide to Supply and Demand Trading
QNT Price Analysis: Further Consolidation Likely Around $100 BRN
QNT remains within a range-bound mood near the $100 psychological number. Further consolidation appears in store as the Bollinger Bands start to flatten, which usually occurs when volatility is low. The RSI oscillator hovering near the 50 mid-level also suggests an equilibrium between buyers and sellers.
QNT Bollinger Bands
The middle band, which is set as a 20-period simple moving average, is at $98.45, close to the $100 round number. The upper and lower band depicts a two standard deviation move away from the middle band, creating a price range.
QNT’s upper Bollinger Band stands at $105.70, which is the upper resistance level. At the same time, the lower Bollinger Band stands at $88.15, which represents the support of the current price range.
Usually, the Bollinger Bands squeeze is followed by a decisive breakout either to the upside or the downside. As long as QNT’s price trades above the $100 level, a breakout to the upside is more likely, and vice versa if we trade below the $100 level.
The Relative Strength Index (RSI) hovers near the 50 mid-level, which supports the idea of establishing a consolidation in the short term.
Looking forward: A break below the September low of $85.93 can signal a resurrection of the bearish trend as we’ll be making lower lows. Conversely, the bulls need a break above the August high of $133.38 to resurrect the bull run.
What is Quant?
Quant is a decentralized network that allows for instant transactions between different blockchains. It uses a unique system called “bridging” to connect different blockchains together. This allows for a more efficient and secure way of transferring data and value between different blockchains. Quant also has its own native token, called QNT, which is used to power the network.
Ripple Showing Rising Relative Strength
Ripple (XRP) has outperformed the overall crypto market showing relative strength versus the Altcoin index. However, the XRP price is still trapped inside a 4-month consolidation pattern, with the upper resistance line being close to the $0.50 figure.
Ripple Relative Strength
The relative strength metric can help us spot which cryptocurrencies are outperforming the general market. And it’s a bullish sign when the XRP price makes a higher low at the time when the Altcoin index, which tracks the performance of the overall altcoin market, is making a lower low.
This means that the XRP’s price is rising while the other cryptos are falling.
Consolidation Pattern The 4-month-old consolidation pattern led to a local bottom of $0.287 and resistance at $0.457. If the current XRP relative strength continues to progress, there is a high probability of seeing a retest of the top of the consolidation pattern.
The rally can even extend further to tag the 200-day simple moving average, which currently stands near the $0.50 mark.
Weekly Stochastic Indicator
Additionally, the stochastic indicator on the weekly chart is emerging from oversold readings (below the 20 level) for the first time since the current consolidation phase. This can further sustain the recent bounce.
Looking forward: Since we’re still inside a consolidation pattern, the real danger is that we may end up with tighter price action until a real catalyst triggers a breakout.
What is a Stochastic Indicator?
A Stochastic Indicator is a momentum indicator that is used to gauge the direction and strength of a current trend. The indicator is calculated by taking the highest high over a certain period and dividing it by the lowest low over that same period. A rising stochastic indicator means that the current trend is gaining strength, while a falling stochastic indicator means that the current trend is losing strength.
Crypto Trading 101: Crypto Trader’s Guide to Supply and Demand Trading
Supply and demand are powerful trading concepts that can help traders determine when crypto prices are likely to reverse. The difference between the classical support and resistance levels is that supply and demand areas have a price range instead of a singular price level.
The disadvantage of support and resistance trading is that the price will likely fail to turn precisely on the level itself. However, if you use the supply and demand trading concepts, you’ll never run into this problem.
What is Supply and Demand in trading?
Supply and demand is one of the most basic concepts in trading. It refers to the number of buyers and sellers in the market for a particular asset. If there are more buyers than sellers, the price of the asset will go up. If there are more sellers than buyers, the price will go down.Supply and demand trading is a strategy that attempts to take advantage of these imbalances in order to make a profit. Traders will buy when there is more demand than supply and sell when there is more supply than demand. By doing this, they can hopefully buy low and sell high, making a profit in the process.
How to Trade Supply and Demand
Determining where the supply and demand areas are is a simple process. All you need to do is to find price zones from where the price had a strong reaction in the past, either up or down.
Supply zones can be found by looking for significant price drops away from a cluster of small candlesticks where prices consolidated for a short period. That entire price consolidation zone represents a supply zone.
Conversely, demand zones can be found by looking for a significant price rally away from a cluster of small candlesticks where the price consolidated for a short period of time. That entire price consolidation zone represents a demand zone.
When the price revisits the supply and demand zones, we’re more likely to get a similar reaction from these price zones because that’s where the buying and selling took place initially. This strategy works better if the trade is also taken in the direction of the overall market trend.
If you’re a crypto trader, understanding and trading on the principles of supply and demand is crucial to your success. We hope that this guide has given you a good foundation on which to start trading. Remember, the key is to always do your own research and stay up-to-date with the latest market trends. With that in mind, happy trading!
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