Importance Of Technical Analysis In Cryptocurrency
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Importance Of Technical Analysis In 
Cryptocurrency
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Every Cryptocurrency is 2
curious to 
buy cryptocurrency in India 
and abroad. This new digital 
phenomenon has become 
so popular among the 
masses across the world. 
The underlying factor which 
has been responsible for its 
growth is Bitcoin. Yes, this is 
the only cryptocurrency 
which made its debut on 
3rd January 2009 by its 
pseudonymous founder, 
Satoshi Nakamoto.
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● Now being a crypto enthusiast, you need to know every aspect of 
cryptocurrency, be it Bitcoin, altcoins, blockchain ledger, or any other 
prominent part of the crypto world. But today, we are going to put our 
emphasis on the technical analysis of cryptocurrency. 
● Now, what is technical analysis? How does it work? Well, if you don’t have 
enough idea about it, then know it today in this blog.
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What Do You Understand By Technical Analysis?
● By technical analysis, we can understand it as examining the trends via 
statistics, collected from volume data and historical price, to classify trade 
opportunities. This technical study revolves around noticing movements of 
price, with the help of analytical tools to analyze asset’s strengths and 
weaknesses. The application of technical analysis is done to any security with 
ancient data including commodities, forex, stocks, and even 
cryptocurrencies. 
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Working Of Technical Analysis
● Besides knowing the basic concept of technical analysis, it is essential to 
know about its working. A technical analysis comprises volume and price 
chart signifying decisions by market participants taken in the past. This 
information impacts decision of future participants in two manners:
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Psychological
● This form of technical analysis reveals about your past effects and your 
current focus for the upcoming circumstances. We can understand like this, 
some traders emphasize the price of an asset, bought by them. When the 
price declines, they come with the decision to sell the asset at times it 
crosses break again.
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Spontaneous
● Some traders can analyze patterns of charts and the ongoing trends that 
seem very natural. They take steps according to selling and buying. If the 
majority of participants adhere to a similar tactic, then it raises the possibility 
of chart patterns adhering to possible results. This way the trend will 
increase more with the joining of many participants.
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OHLC Charts
● Besides understanding technical analysis, you need to understand about 
OHLC charts. OHLC stands for Open-High-Low-Close. These charts show the 
bars known to be as ‘candlesticks’ which reveals the connectivity between 
day’s prices that are either low, open, close, or high. There are two main 
candles associated with it, these are:
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● Bearish candle: this appears in black or red colours indicating the 
situation when closing falls under the opening.
● Bullish candle: this appears in white or green colours indicating the 
situation when closing is upwards to opening.
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Candlestick Charting
● This type of charting belongs to the technical analysis which is prevalent in 
Japan since the ancient period. This technique was used for finding rice 
prices. This type of technique is calculated on simple patterns, but can also 
vary in complicated groups. The sole objective of Candlestick charting is to 
regulate market trends.
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Conclusion
The technical experts involved in it notice the price change and use 
investigative tools to analyze the asset’s weakness as well as strengths. 
The technical analysis applies to trade data related to cryptocurrencies 
also. Overall, it gives you an update about the recent developments that 
are taking place in the economic as well as the crypto sector. Studying 
about technical analysis is as important as searching for topics like the 
easiest way to buy cryptocurrency.
Sources
https://www.cryptoknowmics.com/news/easiest-way-to-buy-
cryptocurrency
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