📊 Technical Analysis
🧠🔍What is Technical Analysis?
- Technical analysis is a method used to study the historical price movements of cryptocurrencies in order to predict future trends.
- It primarily relies on charts, price patterns, and technical indicators, rather than news or political events.
Why do traders use it?
Because the market shows patterns that repeat over time. Technical analysis helps you identify appropriate entry and exit points, understand whether trends are bullish, bearish, or sideways, and assess the strength of the current movement.
Basic Technical Analysis Tools 🛠️
- Candlestick Charts: Show price movements over a specific time period, such as an hour or a day.
- Technical Indicators:
* RSI Relative Strength Index: Measures overbought or oversold conditions 💪📉
* MACD: Indicates changes in trend and momentum.
* Moving Averages: Help in determining the overall trend.
* Support and Resistance: Price levels where interactions frequently occur.
* Patterns: Such as head and shoulders, triangles, price channels 📐
Advantages ✅
- Available to everyone.
- Based on actual data, not just forecasts.
Limitations ⚠️
- Does not take sudden events into account, such as a project collapse or regulatory news.
- It is not an exact science, but relies on probabilities.
- Sometimes gives false signals, especially in weak markets.
