Bitcoin technical analysis for beginners
Bitcoin is a well-known cryptocurrency that has an impact on how other cryptocurrencies function. This is why we need to understand Bitcoin since it can assist us in determining whether or not to acquire a specific cryptocurrency based on Bitcoin’s performance. You must first comprehend the technical analysis that underpins Bitcoin to invest in it. After all, trading cryptocurrency without technical analysis is a dangerous guessing game!
This blog is quite technical in nature; however, it is intended to assist newcomers in understanding the fundamentals of Bitcoin and how technical analysis may help them make informed investing decisions. If you want to be a successful cryptocurrency investor, this site is an excellent place to start.
Why Should Beginners Begin with Bitcoin?
If you are new to the world of blockchain and cryptocurrency, it might be difficult to distinguish between trustworthy and untrustworthy cryptocurrencies.
Several cryptocurrencies, nicknamed “meme coins,” such as Dogecoin, Shiba Inu, and Poocoin, have recently emerged and cost novice investors a significant portion of their capital.
On the other hand, Bitcoin is a far safer (if not the safest) cryptocurrency to invest in. It is the first deflationary crypto asset to exist, and it has recently reached an all-time high (ATH) of more than USD 65,000 per Bitcoin! Here are some additional reasons to believe in Bitcoin:
1. Crystal clear tokenomics
2. Deflationary token
3. Most decentralized cryptocurrency
4. Publically available whitepaper
5. Proof of Work (PoW) mechanism
Technical Analysis: An Overview
On a broader scale, there are two sorts of Bitcoin investors:
1. HODLers are people who buy Bitcoin with the purpose of not selling it for several years.
2. Traders are people who buy Bitcoin with the intention of immediately selling it for a profit. If you want to grow your money faster than traditional techniques by investing in Bitcoin, you must hone your technical analysis skills.
Technical analysis employs the concept of price patterns from the past as well as technical indicators to analyze charts and forecast price movements in the future. This may be used in any market, even cryptocurrencies like Bitcoin (BTC).
When done correctly, technical analysis may help you predict the lows and highs of Bitcoin values across various time periods. Such forecasts will assist you in making informed and data-driven judgments about purchasing Bitcoin at a reasonable price and selling it at a profit.
Getting Started with Bitcoin Technical Analysis Indicators
To get started with technical analysis, you’ll need a platform that offers dependable and advanced tools. WazirX, an Indian cryptocurrency exchange sponsored by Binance, the world’s largest cryptocurrency exchange, provides all of the tools and more for a newbie to get started with Bitcoin technical analysis.
For novices, here are two indicators to get started with:
1. Weighted Moving Average (MAW)
The MAW is used to evaluate the overall emotion felt throughout the market. This is accomplished by analyzing price movements related to the short, medium, and long-term moving averages. The moving average is computed by simply averaging the data points over a specific time period.
2. The Relative Strength Index (RSI)
The RSI is a momentum indicator.’ It measures the pace and change of price movements by comparing the number of recent increases to recent downturns. It varies between 1 and 100. It is often assumed that the RSI should be less than 30 when purchasing and greater than 70 when selling.
3. Fractal of Williams
This is a momentum indicator that uses the ADX formula. While ADX can assist you in delving into the micro, Williams Fractal is a superb indicator for a rapid macroscopic picture of momentum patterns.
This oscillating indicator displays the strength of an asset’s upward and downward price movement.
Fundamental Analysis vs. Technical Analysis
Fundamental analysis is based on the premise that underlying variables like a company’s performance, management, and market size impact the price of an asset.
On the other hand, technical analysis does not take into account any economic or fundamental issues. It focuses solely on the chart and indicators such as RSI, MACD, and candlestick patterns.
To summarize, Bitcoin trading is an interesting business in which many individuals want to participate. However, you should first learn about the cryptocurrency market before you start trading.
Also Read: How to: Use candlestick patterns