What indicators can help analyze market fluctuations? 💥💥💥
According to Mlion.ai analysis, based on the current market environment in July 2025, the following indicator system can effectively help traders analyze and predict market fluctuations:
📊 Core Volatility Indicators
1. Average True Range (ATR)
The most practical volatility measurement tool:
- Calculates the average price fluctuation over a certain period
- An increase in ATR indicates rising volatility, and a decrease indicates the opposite
- Used to set dynamic stop-loss levels: Stop-loss distance = ATR × 2-3 times
- Practical application: Reduce positions when ATR > 20-day average, increase positions when ATR < 20-day average
2. Bollinger Bands
A perfect combination of volatility and trend:
- The distance between the upper and lower bands reflects the current level of volatility
- Price touching the upper band indicates high volatility, touching the lower band indicates low volatility
- Key signal: A narrowing of Bollinger Bands indicates a major market movement is imminent
- Trading strategy: Positioning during low volatility periods, reducing positions during high volatility periods
3. VIX Fear Index (Crypto Version)
A thermometer for market sentiment:
- Measures market expectations of volatility over the next 30 days
- VIX > 30 indicates market panic, usually a buying opportunity
- VIX < 15 indicates market over-optimism, caution is needed
- Characteristic of 2025: With institutional funds entering, the overall level of VIX has decreased
🔍 Technical Analysis Indicator Combination
4. Relative Strength Index (RSI)
Precise judgment of overbought and oversold conditions:
- RSI > 70 and price makes a new high = bearish divergence, volatility may decrease
- RSI < 30 and price makes a new low = bullish divergence, probability of rebound increases
- Volatility application: When RSI oscillates around 50, it usually accompanies high volatility
5. MACD Momentum Indicator
Early signals of trend changes:
- A contraction in the MACD histogram indicates a decrease in volatility
- A golden cross or death cross accompanied by increased volume indicates rising volatility
- Practical tips: MACD divergence often indicates major volatility is about to occur
6. Volume Indicator (OBV)
A true reflection of capital flow:
- Price up with increased volume = healthy rise, volatility can be sustained
- Price up with decreased volume = false breakout, high volatility cannot be sustained
- Key signal: Abnormal volume often accompanies high volatility
📈 Advanced Volatility Analysis Tools
Source: mlion.ai