How to identify bullish and bear trends in cryptocurrency
The cryptocurrency world is known for its volatility, unpredictability and rapid growth. As a new investor or merchant in a cryptographic space, it is important to identify the bullish and bear trends for deliberate decision -making. In this article, we will study the basics of these trend identification, models and indicators used by merchants and how to use them effectively.
Understanding Bullish trends
The bullish trend occurs when cryptocurrency price increases over time, stating that more buyers are coming to the market than vendors. This may be due to a variety of factors such as:
- Increased adoption : As more users accept a certain cryptocurrency, the demand for it increases, increasing the price.
- Improved infrastructure : Development of new infrastructure, such as exchange and wallets, promotes transactions and attract investors.
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Positive Mood : Positive news or project events can generate hype and increase price.
Bullish trend identification
To identify the bullish trend in cryptocurrency, look for:
- The increasing volume : Sudden trade growth indicates the increasing interest and acceptance.
- New partnerships and cooperation : Partnership with established companies or organizations can signal increased investment and use cases.
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Positive Market Mood : High trade volus on social media platforms such as Twitter and Reddit often indicate a positive trend.
Identification of bearish trends
A bearing trend occurs when the price of cryptocurrency decreases over time, stating that more vendors are entering the market than buyers. This may be due to a variety of factors such as:
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Reduced adoption : A reduction in user acceptance or interest in a particular project can lead to lower demand.
- Infrastructure questions : Technical difficulties with platform or infrastructure can deter investors and users.
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Negative messages or events : Negative messages or events on the project can generate fear and sell pressure.
Identification of bearish trends
To identify a bearded cryptocurrency trend, look for:
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Link of volume
: The reduction in trade volume indicates a reduction and acceptance of interest.
- Reduced Partnership and Cooperation : A reduced partnership with established companies or organizations may indicate a reduced investment.
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Negative market mood : Low trade volume on social media platforms such as Twitter and Reddit often signals a negative trend.
Types of indicators used by traders
Traders use different indicators to assess the strength and direction of trends in cryptocurrency markets. Some widespread are:
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Relative Strength Index (RSI) : Measures recent price changes to determine excess or sell conditions.
- variable average (MA) : Calculates the average price of safety within a specified period, helping to determine the direction and endurance of the trend.
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Bollinger Bands : Moving Medium Values Schedule with Standard Direct Structures helps determine volatility and possible breakdown.
- Support and Resistance Levels : Identification of the main support and resistance level based on historical data and market mood can help traders predict price movement.
How to effectively apply indicators
Consider the following questions to effectively use the indicators in your trading strategy:
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Use the indicator combination : Combine several indicators to get a more comprehensive trend view.
- Monitor indicator readings : Continuously monitor the readings and adjust your strategy as needed.
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Trading Transfer Storage : Trade at certain trends, avoiding impulsive decisions based on short -term fluctuations.
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