Best Indicators for Bictoin and Cryptocurrency Trading

[muhammadzaid]

"In the business world, the view in the rearview mirror is always clearer than the view through the windshield," said Warren Buffett, one of the world's most prominent investors. Their point is that it is much easier to analyze past events than to try to predict the future. This idea works particularly well in the cryptocurrency market.

Indicators for bitcoin allow you to look into such a mirror and accurately predict future trends. In this article, we will talk about the five most well-known indicators that help predict changes in cryptocurrency prices best application forex.
First of all, it is worth explaining what the indicator itself is.
What is an indicator in simple terms?
An indicator is a technical analysis tool that allows you to predict price movements. The main source of information – historical price data-is converted into easy-to-read indicators using mathematical methods. Hidden numbers behind mathematical formulas are displayed on the chart next to the price and allow investors to make conclusions about when to invest in an asset, and whether it is worth it.
Of course, the accuracy of indicators is not one hundred percent. However, they give you an idea of the trends on the charts, their direction and strength. The price movement has momentum. The direction of the trend depends on how strong it is.
Here's an example. Let's say Christmas comes in 21 days, and a children's store has a toy that sold out on the first day in the amount of 20,000 pieces. Every day the increase in the number of toys sold is 5 thousand pieces. The owner of a nearby store, seeing such a trend, will want to buy such toys, and, most likely,will not lose. But the level of sales will still not be as high as the owner of the first store. If sales start to fall, then the owner of the second store will think about whether to buy toys that are falling in demand.
Indicators on the charts show the possible behavior of prices, buyers and sellers in the future. But this behavior will not be 100% accurate. So, what indicators should you try when working with cryptocurrency?
1. " CloudsIchimoku"
This is an indicator that looks like 5 lines on the chart. The essence of the lines is the average values for different time periods selected by the trader. If two lines intersect, you can see a "cloud", because the area between the lines will be reduced. If the price chart is above the "cloud", then we can expect an uptrend, if below – a downtrend. If the price and cloud directions are the same, then the trend is considered strong.

1. " CloudsIchimoku"
2. Relative Strength Indicator (RSI)
An indicator that shows how much an asset is overbought or oversold. The relative strength indicator is based on historical price data, then it determines the demand for the asset and predicts the possibility of price correction up or down.
The RSI has two levels: 30% and 70%. If the RSI value is above 70%, then the price of the asset may fall. If the indicator is below 30%, then there is a high probability that the price will start to rise.
2. Relative Strength Indicator (RSI)
3. Moving Averages (Moving Average-MA)
This indicator shows the average price of an asset over a certain period of time.
As a rule, the moving average is calculated over long periods of time, so it is not sensitive to short periods. According to the indicator chart, you can see support levels (a line below which the price may not fall) and resistance levels (a line above the price chart above which the price will most likely not rise). These lines are useful moving averages.
3. Moving Averages (Moving Average-MA)
4. Fibonacci Levels
Fibonacci levels also help to predict the price direction. This indicator is considered very useful when trading both stocks and other stock market instruments, as well as cryptocurrencies. The standard Fibonacci levels are as follows: 0; 23,6; 38,1; 50,0; 61,8; 76,4; 100.

Fibonacci levels allow the trader to identify strong support and resistance levels, possible end periods for price corrections, and the current trend.
4. Fibonacci Levels
5. Sales volume
This indicator shows the demand for an asset.
As with any other asset, the cryptocurrency market is always worth checking the level of sales. Strong price trends are confirmed by the amount of demand for the product. The higher it is when the price increases, the more confident the trend is. The number of traders who are ready to buy an asset gives an impulse to the price movement. If the momentum is weak, there is a high probability that the price will start to decline. And vice versa.