The impact of technical analysis on cryptocurrency trade: how BTC is affected by graphics patterns
Cryptocurrencies, particularly Bitcoin (BTC), have been at the forefront of the digital currency revolution. Since its inception in 2009, BTC has suffered numerous price fluctuations due to market feeling, economic indicators and technical analysis. This article will deepen how technical analysis influences Bitcoin’s trade and will explore how different graphics patterns can affect the price of cryptocurrency.
What is technical analysis?
The technical analysis (TA) refers to the study of historical data and graphics to predict future price movements in financial markets, including cryptocurrencies such as BTC. TA implies analyzing several factors, such as price trends, relative force index (RSI), mobile averages and other technical indicators to identify possible commercial opportunities.
How does Bitcoin price affect technical analysis?
The technical analysis has a significant impact on the Bitcoin trade due to several reasons:
- Mercado feeling : The tone of the feeling of the market plays a crucial role in determining the BTC price movement. Positive feeling (for example, optimistic investors, bullish news) can increase prices, while negative feeling (for example, bearish news, sales pressure) can lead to decreases.
- Graphics patterns : Different graphics patterns have different characteristics that can influence the price of Bitcoin. For example:
* TRENDS : Investors are often favored by the reversions of established trends, which leads to greater purchase pressure and higher prices.
* Bullish Erofing : When a stock forms a pattern of bullish wrapping candles with lower maximum, it indicates a potential reversal.
* GUBLFO ENGULFO : Similarly, bearish wrapping patterns may indicate a downward trend.
- Indicators
: The use of several technical indicators can also influence the BTC price movement:
* Relative Force Index (RSI) : An ascending RSI may indicate overcomprajía conditions, which leads to possible liquidations.
* Mobile averages (MA) : MAs in the short term tend to be more volatile and sensitive to market changes, while long -term MA are less susceptible to price fluctuations.
- Market cycles : The price of BTC is influenced by broader market cycles:
* Trend reversions : BTC often experiences reversions of trends, with the rupture or continuation of a bearish trend that leads to greater purchase pressure and higher prices.
Key chart patterns that influence the price of Bitcoin
It is known that several graphics patterns affect the price of Bitcoin:
- Bullish Erofing
: A bullish wrapping pattern is characterized by:
* A larger candelabro that closes above the maximum of the previous day.
* The wick (candlestick) of the wrapped candle is longer than its body, which indicates a strong impulse up.
- Bassist engulf : On the contrary, bearish wrapping patterns include:
* A smaller candlestick with a shorter wick that closes below the minimum of the previous day.
* The wick (candlestick) of the wrapped candle is shorter than its body, which indicates a strong impulse down.
- Head and shoulder formation : This graphic pattern indicates a potential reversal:
* A large head is formed at the top of the reverse triangle.
* A small shoulder is formed at the bottom of the same reverse triangle.
- Full of gap : If a vacuum between two price levels is closed, it can indicate a strong purchase or sale pressure.
Conclusion
The technical analysis plays a crucial role in determining the Bitcoin price movement, with several graphics patterns that influence its trajectory. By understanding these patterns and using technical indicators, investors can increase their chances of successful operations in the cryptocurrency market.
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