Crypto Technical Analysis
In this technical analysis review, we intend to provide you with a proper way how to do conduct crypto technical analysis. Trading without prior market investigation has a high risk of failure.
Apart from the definition, we also go in-depth over whether the technical analysis is applicable for crypto. We also show the difference between Forex and cryptanalysis, as well as platforms that do offer technical investigation. You should also check our article about crypto fundamental analysis to complement your reading.
What is Crypto Technical Analysis ?
Crypto Technical analysis is a tool that traders use to identify price trends. It helps them figure out how the market behaves, providing a sound basis for smart trading choices. Although may sound complicated, it is nothing more than analyzing the demand and supply in the desired market.
Technical analysts look to identify patterns in the price change throughout history. Based on the existing statistics, investors make an assumption on the future price and come up with a trading decision. Chart investigation is a crucial part of any crypto technical analysis. You can identify trends by keeping track of moving averages, support and resistance levels, and trading volume.
There are two main types of tech analysis that every crypto traders should employ on daily basis. Their concepts are quite simple but the implementation is what differs successful investors from others.
– Short-term technical investigation (the period is between a day and a week, with emphasis on small price changes and patterns. You, as a trader, are trying to find peaks and bottoms that may occur within next hour.)
– Long-term technical investigation (ranging between a month and a year. This is used for a general course of a chosen crypto and whether it should be in your portfolio in a long-term.)
Is Technical Analysis Applicable for Crypto?
The same crypto technical analysis tools applicable to Forex and other markets can be used for digital coins. Additionally, the crypto market is quite a volatile one, even more so than mainstream industries. Thus, tech analysis is a part of the puzzle you need do solve should you wish success.
Crypto technical analysis is more reliable in stable markets. Using it on bitcoin can prove to be quite taxing, due to how frequent value changes are. However, that does not mean technical analysis will not work. With careful preparation and patience, traders can locate patterns somewhat accurately.
On the other hand, we all know that the value of cryptocurrencies can change drastically in no time. Thus, deep analysis with indicators, cross-referencing cryptocurrency technical analysis charts, and other methods are important.
Crypto Trading Psychology vs Forex Trading Psychology
Experts will tell you that trading psychology has an advantage over skill and knowledge when the time comes for a decision. You need to be aware of four emotions you experience while trading – fear, anxiety, greed, and euphoria.
There is no big difference when it comes to crypto VS Forex trading psychology. The crypto market is more volatile and it might require quick decision making. Other than that, the traders exhibit the same behavior. Cryptos already operate for almost ten years now, gaining fame rapidly since the end of 2017.
Greed toward becoming rich may drive you to throw logic out the window and make an irrational trading decision. Greed sometimes comes combined with euphoria. If you earn some profit, you might think that you cannot do wrong. This, in turn, may result in poor decisions and lead to losses.
On the other hand, fear prevents you to make logical choices because you are afraid to lose money. If you record a loss in one trade, you become anxious. The experts suggest setting both profit and loss limits to maximize your long-term earnings.
Types of Technical Indicators
Here are some of the best indicators for cryptocurrency that you should definitely know about. These crypto technical analysis charts can help you disconcert trends and patterns, no matter the period involved (long or short-term). Beginners should start with these as they approach their very first technical analysis: Trend Lines, Resistance & Support Levels, Simple Moving Average (SMA), and Trading Volume.
Trend Lines are one of the simplest tools when it comes to tech analysis. They show the general direction of the price trend, whether it is going up or down. However, keep in mind that it serves a true purpose only when combined with other indicators mentioned below.
Resistance and support levels show support for a given crypto. They are horizontal, as opposed to trend lines which are vertical. Support level shows that traders are willing to buy the digital coin. This occurs when the price bar goes green substantially. Resistance level line is the exact opposite. It shows a red bar, where sellers are dominant, driving the value down.
Simple moving average (SMA) is a tool even newbies can utilize. The tool takes a specific period of time and averages values as to show a general trend for the past hour or a day. Instead of focusing on one change, SMA works with several value changes, generating a pattern.
Trading volume is an indicator that combines price and volume analysis. This tool shows how many coins were sold or bought, pinpointing whether small or large transactions occur. Thus, you gain an understanding of the trend you are dealing with (bear or bull).
Best Web Platform for Crypto Technical analysis
Dozens of a different cryptocurrency analysis tool for technical analysis are available to internet users. The crucial features to look for are live updates and comprehensive information. You can also choose between simple and advanced interfaces depending on your level of knowledge and skill.
CryptoWatch offers real-time market data and price charts for over 30 supported cryptocurrencies. You can also choose one of 19 available exchanges or look for quotes. The charts offer comprehensive information and drawing tools you can use to predict future price fluctuations.
The platform is quite popular with beginners, as it is straightforward and easy to use. You should use it if comparing exchanges is your main goal.
CrypTrader has been around for five years and it is an excellent tool for technical analysts. You can choose markets from several different exchanges and analyze various charts. Candlestick patterns, depth charts, open orders, and trade history, are all available. The interface is more suitable for advanced traders due to how many indicators are available.
Like many of other cryptocurrency tech charts, CryptTrader comes as a free deal. It provides information regarding trade values, volumes moved, price depth, and comparison between platforms.
Trading View has a simple interface appropriate for starters but is also one of the most popular of the bunch. It keeps track of more than 20 crypto-to-fiat and crypto-to-crypto markets. It supports Bitcoin, Ripple, Ethereum, Bitcoin Cash, as well as U.S. Dollar, Euro, British Pound, and Japanese Yen.
You can take a look at the technical analysis summary and get advice on whether you should sell or buy. More importantly, you can even design your own chart, provided you know how to navigate the website. Apart from a large number of supported trading platforms, trading View has a lot of indicators in its possession.
Take a snapshot below as an example. On the top-right corner, you have indicators that are at your disposal. You can change these, alongside with platforms you wish to watch at any time.
You can change color bars of your candlesticks, take snapshots, save reports, and lots of other, useful stuff. Cryptocurrency charts live data is standard for the industry now and Trading View is no different in that aspect.
Cboe focuses on the stock exchange, but at the beginning of 2018, it launched Bitcoin futures. They are doing business in Chicago, which means that US-based customers can use their services. If you are a veteran trader, using Cboe services is a must. They offer a bunch of cryptocurrency analysis tool for technical analysis and trading options.
Best Mobile App for Technical Analysis
It is crucial to have access to your tools at all times. However, you cannot be by your PC 24/7. That is why you should install and use some of the free mobile apps for technical bitcoin analysis.
Coinigy is a perfect tool to manage your portfolios and crypto trading endeavors on the go. The app is free for both Android and iOS and you can get it via their respective stores. All updates are live and the tool offers incredibly comprehensive information. Combined with a simple interface, that makes Coinigy a must-have app!
Additionally, Coinigy is not just charting tool but an overall software solutions provider. You can actually use it as an API/bot program to streamline your trades. However, it is important to mention that bots can backfire if not maintained properly and regularly.
zTrader supports more than a dozen exchanges and hundreds of currencies. You can quickly move from one currency to other thanks to the responsive and user-friendly interface. The charts provided enable a reliable cryptocurrency analysis tool for technical analysis. The app is free but it is only available for Android.
It is of a lightweight size (only 2MB of space required). Thus, use it when you wish for a quick update on the markets. Platform updates data regularly, meaning that all important trends are under your fingertips. Keep in mind that SAM and other, more complex tools are not available at zTrader.
Blockfolio is a useful app that provides real-time candlestick charts and live order book for each currency supported. It also tracks the earnings and losses and sorts them depending on currencies you used. A custom news feed with recent news is also available. The app is free and available for both iOS and Android.
So far, Blockfolio supports 80+ exchanges, candlestick charts, and a large number of digital coins. It is a good platform for signals as well since you can set up price alerts on chosen platforms.
The features of TabTrader include BTC charts, as well as technical indicators such as moving averages, Bollinger bands, and others. You can even use the direct trading options from the chart. It supports Bitcoin, as well as Ethereum and Altcoin. TabTrader is available for free via the official website for both iOS and Android users.
You can track all main crypto trading centers through crypto tools like a trend, horizontal lines, and technical indicators. The app also provides a classical representation of crypto historical data regarding bitcoin (altcoins as well) volume and price.
Social Media Crypto Technical Signals
Apart from charting platforms, social media can bring in lots of interesting data back to you. When conducting technical analysis, it is important to take all perspectives. Other traders do provide their own findings, often for free.
One of the best sources for trader’s views on the market is definitely Twitter. Crypto leaders often post results form their own analysis, which you can combine in your report. Beginners can learn quite a lot from influencers that have been in the game for a long time.
Just keep in mind that their investigation might have faulty data that would not represent the real market situation. Crypto industry is volatile and as such, analysis works for that particular moment. Check out our guide on top Twitter accounts regarding tech analysis, signals, and general crypto trading advice.
If you are looking for a more comprehensive guide regarding crypto technical analysis, blogs should be your choice. Bloggers often provide a detailed description of their findings, as well as indicators they use. These websites also provide a good source of knowledge for starters, since articles do not disappear like in Twitter/Facebook. You can check out our article regarding the top crypto trading blogs in the industry.
Apart from blogs and Twitter, many traders post their analysis online through other media as well. These include Instagram, Facebook, crypto forums, and YouTube.
Technical analysis is crucial for traders to have success when investing in cryptocurrencies, as shown but this article. There are many platforms that offer the service in terms of charts, data indicators, and API tools. These instruments gather data and translate it into information for you.
Yet, we do need to emphasize the importance of your own involvement. At the end of the day, you are the one with a final decision on when and how to trade. Thus, you should not rely 100% on programs but use your own knowledge and experience as well.
We continuously publish free crypto technical analyses in our blog.