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In digital currency technical analysis, there are some common and key terms that are used to describe trends, patterns and charts. Below are some common terms in digital currency technical analysis:
- Price chart: It is a chart that displays the currency price over time. Popular charts include line charts, candlestick charts, and median charts.
- Support Level: It is a level in the price chart where the price usually stops and refuses to continue decreasing or falling. This level is considered as the lower limit of the price in the market.
- Resistance Level: It is a level in the price chart that usually stops the price and refuses to continue rising or rising. This level is considered as the highest price limit in the market.
- Candlestick Patterns: Patterns linked by candlestick charts and help to identify future price patterns. Some of the popular patterns include Marubozo, Candlestick, Nightstar, as well as reverse patterns such as Hanging Reverse, Candlestick Reverse, and Nightstar Reverse.
- Moving Average: One of the important indicators that is usually used in technical analysis. A moving average calculates the average price over a specific time period and helps identify price trends.
- Pivot Point: It is a point in the price chart that is used as a reference for analyzing support and resistance levels. This point is usually calculated based on the previous day’s market price, the previous day’s highest and lowest price, and the current price.
- Relative Strength Index (RSI): It is one of the common indicators in technical analysis that shows the strength and speed of the price trend. This index ranges from 0 to 100 and is used to detect overbought and oversold buying or selling conditions by comparing price changes.
Digital Currency Technical Analysis Terms
These are just a few examples of common terms in digital currency technical analysis. To better understand and use technical analysis, it is recommended to refer to specialized sources and relevant books.
Technical analysis is a method used in financial markets, including the digital currency market, to predict the movement of prices and asset values. In the following, I will discuss some terms related to technical analysis in digital currencies (Cryptocurrencies):
- Price Chart: It is a chart that shows the price changes of a digital currency over time. This chart is usually displayed as a line chart, a candlestick chart, or a bar chart.
- Support and resistance: These are price levels that are usually viewed as important points for price movement over time. The support level is considered as a level where there is a possibility to stop the price decrease when the price decreases. Also, the resistance level is considered as a level where there is a possibility to stop the price rise when the price rises.
- Japanese candlesticks: This is a chart drawn using Japanese candlesticks. Each candle provides at least some information about the market (open and close price, high and low range) in a certain time frame. Various Japanese candlestick patterns provide information about price trends and market strengths and weaknesses.
- Technical indicators: Technical indicators are tools that, based on historical price and volume data, provide signals about the direction of price movement and market strengths and weaknesses. For example, indicators such as RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence) and Bollinger Bands are among the most popular technical indicators in the digital currency market.
- Price patterns: Price patterns are patterns that are identified in the price chart and are used as pointers about future price changes. For example, Head and Shoulders, Double Top and Triangle patterns are common price patterns in technical analysis.
These were just a few examples of technical analysis terms in the digital currency market. Due to the complexity of the market and the variety of tools, there are still other terms that are used to analyze and predict prices and market behavior.