Technical Analysis in Crypto: Why Do You Need to Study It?


Before diving into technical analysis, it’s critical to understand the trend. Traders use technical analysis to forecast the possibility of a market dynamics shift. It is supported by evidence. Some people seem to believe that detecting a trend is easy. They simply regard it as the market’s path. Yes, that is correct. However, in this essay, we will attempt to analyze it. Methods for technical analysis can be applied to any time frame, including one-minute, daily, weekly, and monthly charts. Why? It is because human nature is quite consistent. The interpretation is the same for each time frame. 

The main difference between monthly and daily charts is that the disagreement between market participants is larger and more intense on monthly charts. As a result, the trend inversion signal on the weekly chart is far more important than on the daily chart. The principles and interpretation of trends in ten-minute charts are the same as they are in weekly charts. If you are a long-term trader who sees a common trend reversal on the 10-minute chart, it is closely connected to your market analysis. 

A long-term trader cannot make decisions on a 10-minute chart. A long-term trader can use this time frame if the same signal seen on the 10-minute chart appears on the weekly chart. Enrich your knowledge about the crypto world by visiting crypto media sites such as TheMasterPlan. The site is suitable for beginners and will assist you on your path to be a better crypto trader with its helpful articles and insights about the market.

There are three main trends to keep in mind. But first, we need to understand the current trend. A trend is defined as an irregular time frame of price fluctuations that only moves in one path. According to Investopedia, a trend is the general price direction of a market or asset. In technical indicators, trendlines or price movements emphasize when the price makes higher swing highs and lower swing lows for an uptrend, and lower swing lows and lower swing highs for a downtrend. There are numerous other types of trends in technical analysis. However, the three most common trends on which traders and investors base their decisions are the primary, intermediate, and short-term trends. The study that we will perform will only be a reference. We’ll talk about trend circumstances that have occurred commonly in the historical past of charting in various markets. Some trends last for a long time, while others last for a short time. We will rely on our research on the financial markets because the crypto market is still in its infancy and we lack sufficient data. 

Let’s start with the most obvious trend. The main trend can last from 9 months to 2 years or more. This trend is a fundamental representation of investors in the market. The timeframe of a bull and bear market will take about four years to add up. Because it takes longer to develop, the bull market tends to last longer. In contrast to the bear market, it simply crashes faster. A bull market lasts for 3 years, while a bear market will only last one. Both long-term and short-term traders must be aware of this to foresee and monitor potential reversals.

Let us now move on to the second, intermediate trend. On any market chart, there is no moving price in a straight path. The motion of the main uptrend generally grinds to a stop, with numerous reactions occurring. These are known as countercyclical tendencies or intermediate price swings. It occurs during the primary bull market, which can last 6 weeks, 9 months, or even prolonged. The last trend is the short-term one. It typically takes between 3 and 6 weeks. Price fluctuations in the middle of a trend are caused by this trend. Random news, occurrences, and other market events all have an impact on its fluctuations. It is the most difficult to detect when compared to intermediate and primary trends. 

The longer a pattern, the easier it is to identify. The shorter the period, the more unpredictable the outcome. This information is provided by the Dow theory. This principle serves as the foundation for every technician. This is a simple fact that so many people are unsure of. This concept is one of the fundamental elements of technical indicators, and mastering it before delving into various approaches can help you better understand them. Obtaining professional help from experienced crypto traders is a smart move for some traders, especially newbies who lack the perseverance to learn technical terms.

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