Technical analysis indicators for crypto trading

Recent developments in the crypto market have increased traders’ interest in this space, with Bitcoin and other cryptos posting positive gains and pushing towards new highs.

However, prices can still move in both directions rapidly in the space of a day, which can catch traders off guard unless they’re well prepared. To help navigate the markets successfully, technical analysis can make a big difference. Below we’ll cover some of the most useful indicators for technical analysis that traders can take advantage of.

Al-text: technical analysis for crypto trading

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Moving averages

Moving averages had been used for technical analysis since decades ago and even in the crypto space, they can act as reliable guidelines for determining areas of support or resistance. Although many traders make the mistake of using moving averages crosses as a trigger for entering the market, the more suitable approach will be to use these lines on the chart as areas where pullbacks might stall in a trending market. 

Short-term MAs like 10-period or 20-period, as well as longer MAs such as 50-period, 100-period, or 200-period, continue to be highly efficient, which means a lot of market participants are monitoring and placing trades around them. 

Bollinger Bands

Another popular indicator for crypto trading is Bollinger Bands. Same as with moving averages, many times traders will notice how the price turns when reaching either side of the range, creating a proper solution for trading both corrective structures and trending markets. 

The good news is that Bollinger Bands is available with many different brokerages and popular charting service TradingView. This is one of the top-charting solutions in the market, integrating a variety of technical analysis tools that can be used for analyzing any cryptocurrency. 

Integrating TradingView is a standout customer benefit for a broker, and easyMarkets represents one of the latest brands to allow customers to access their trading accounts via TradingView. This unlocks further potential in terms of technical analysis capabilities and also, access to its social trading feature. 

Fibonacci retracement levels

Fibonacci retracement levels like 23.6%, 38.2%, or 61.8% are constantly watched when the trend reverses and prices move on the other side. A good example is Bitcoin, which is now approaching the 61.8% retracement level for the trend that started in March 2020 and ended in mid-April 2021. The selling is already showing signs of weakness as the price approaches that key Fib level, suggesting buyers are entering the market and absorbing most of the selling orders.

Relative Strength Index (RSI)

Last, but not least, the Relative Strength Index or RSI can still be used for spotting overbought or oversold conditions in any cryptocurrencies. Given markets don’t always move up in a straight line, pullbacks can be anticipated by using this oscillator. However, keep in mind it can also post false signals or can trade in oversold/overbought territory for an extended period. 

Same as with the other indicators, traders need to keep a mindset based on probabilities. No trading setup should be taken for granted and once a trade is open, flexibility and constant monitoring are requiring, as market conditions can change at any point. 

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