Technical analysis is a fundamental tool for those who want to understand price behavior in the crypto world.
Here are the basic concepts you need to know to get started:
1. Japanese candlesticks:
Each candle shows how the price moved in a specific period (for example, 1 hour or 1 day). The thick part (body) indicates the opening and closing, and the thin lines (wicks) show the maximum and minimum reached.
2. Supports and resistances:
Support: is a price level where demand is strong and usually stops the decline.
Resistance: is a level where supply is strong and usually halts the rises.
These levels act as 'walls' for the price, and breaking them can indicate significant movements.
3. Trends:
A trend is the general direction of the price: it can be bullish (up), bearish (down), or sideways (without a clear direction). Following the trend helps make better decisions.
4. Volume:
Volume shows how many coins have been traded in a period and confirms the strength of a movement. For example, a rise with high volume is more reliable than with low volume.
Learning to interpret these elements is key to anticipating movements and not entering or exiting blindly.
You don't need to be an expert to start; with practice and patience, you will better understand the charts and make the most of your investments.