Crypto Swing Trading Summary (C2): Market Analysis

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When you first look at a stock chart, everything seems chaotic.

This is even more true with crypto.

But as you gain knowledge, you will start to see patterns and signals which you can turn into profit.

In the world of crypto, trading, technical analysis is when you analyze price activity and volume to help you predict future trends.

Here is an overview of some things you can look for:

Candlesticks: Visual representations of price action which can give you insight into market sentiment.

Support and resistance levels: Price points which the market gets “stuck” on either on the downside (support) or the upside (resistance). Identifying these sticking points is useful for determining possible entry and exit points.

Moving averages: A line depicting the average of prices over time. This helps you to see the trend of the asset, either bullish (on its way up) or bearish (on its way down). When the 50-day moving average crosses over the 200-day moving average, it is typically a sign of bullish (positive) sentiment.

RSI: The relative strength index indicates if an asset is overbought or oversold.

MACD: Useful for confirming trend direction and strength.

Volume bars: Increases in volume may mean large fluctuations in price are coming.

There are many more indicators you can use to inform your decisions. No single one is best. Always use several of them over different time periods to confirm your findings before making a trade.

In traditional markets, fundamental analysis means examining financial accounts and economic indicators.

When it comes to crypto, you need to understand the coin’s tokenomics. This includes how the digital token works, how it’s made, how it's used, and why it has value. A coin with strong tokenomics has a greater chance of increasing in value.

Another thing you must consider is the team behind the token. There are many scams out there. A trustworthy team of developers with a good track record means a lot.

Examining blockchain data directly can also yield useful information.

And finally, market sentiment in general is important. Keep up with current events related to crypto. News, regulatory events, and even tweets from prominent influencers can all have an impact on specific coins and the market as a whole.

To give yourself the best chance of success, you must combine technical and fundamental analysis.

You must also keep up with all the constant changes. The crypto market is still very young and the market is always growing.

In order to make the most profits, you must constantly be refining your analysis techniques.

Read the next chapter here.

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