Top 5 Best Indicators for Crypto Trading

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Cryptocurrency trading is akin to trading equities, currencies, and commodities. Market participants use various strategies to increase their profits. The blockchain and cryptocurrency industries are the only ones that have on-chain analysis. To estimate future price movements, dozens of technical analysis approaches utilise a number of indications.

Look Top 5 Best Indicators for Crypto Trading 

We offer indications for those who don’t yet have a strategy for trading cryptocurrency but want to develop one.

• Cloud Ichimoku indicator

Ichimoku is a series of technical analysis methods combined into one indicator. It can discover support and resistance levels, highlight when to enter and exit a market, and measure current trend strength. The indicator builds a “cloud” of numbers from numerous moving averages, which traders may use to detect resistance and support or to determine the current trend.

• MACD

The MACD formula shows trend-following momentum. How to find out:

26 years (EMA) – 12 period EMI (at closing prices)

If the MACD is positive, the market is rising. A bullish cross occurs when the MACD rises and is ready to cross the signal line. If the MACD is negative, momentum is decreasing. A “bearish cross” occurs when the MACD slopes down, crosses the signal line and goes below it.

• Relative Strength Index (RSI) 

The RSI measures an asset’s strength by looking at recent price changes. This may be used to determine overbought or oversold assets. How to find out:

RSI = 100 minus 100 (1 plus RS). RS = Average of price increases and decreases. Usually, 14 periods are employed, although it is up to the trader to select.

If the value is less than 30, the asset has been overvalued. If the value is over 70, the asset has been overpaid for.

• Bollinger Bands

Bollinger Bands is an indicator used to determine the movement of an asset’s price inside a band by allowing the width of the upper and lower bands to vary in tandem with price fluctuations. If the price of an asset moves outside the upper and lower bands, a price reversal may be forthcoming. It can be read as follows:

Middle Band – Simple Moving Average over 20 Days (SMA)

Upper Band – SMA longer than 20 days (Standard deviation of price over 20 days x 2)

Lower Band – SMA over 20 days – (Standard deviation of price over 20 days x 2)

• On Balance Volume

OBV is an indicator that analyses asset volume flow to forecast price movements and produce buy/sell recommendations. It is a cumulative indicator, which means:

An asset’s price closes higher, adding volume to the OBV total.

If an asset’s price falls, the volume for that day is deducted from the OBV total.

If it’s the same, nothing happens.

Simple: a higher high (unless a resistance zone) signifies positive volume pressure, and a higher price is likely. A lower high is the reverse, unless (hits a support zone). This suggests there is negative volume pressure and the price of an asset may fall.

Conclusion

These are just a few of the best indicators for crypto trading technical analysis, but there are many more. What works best for one trader might not work as well for another, so it’s always a good idea to try as many as you can at first to see which ones work best for you.