Technical analysis (TA) in crypto can simply be explained as the practice of predicting future price movements of cryptocurrencies by studying past candlesticks.
Key Ideas in Crypto Technical Analysis
📊 Price Charts
Uses tools like candlestick charts to see how price has moved over time, each candle shows open, high, low, and close prices for a specific time frame.
📊 Support and Resistance
Support: a price level where buying pressure is strong enough to prevent further drops.
Resistance: a price level where selling pressure often stops further gains.
📊 Indicators & Tools
Moving Averages (MA): Show average prices over time to spot trends.
Relative Strength Index (RSI): Shows if an asset is overbought or oversold.
MACD: Tracks momentum changes.
Volume Analysis: Measures trading activity to confirm trends.
📊 Chart Patterns
Traders look for shapes like head and shoulders, triangles, or flags, which often signal trend reversals or continuations.