The emergence of cryptocurrency introduced a decentralized banking system. This market has seen steady growth since its emergence, with more coins being created.
The growth has also increased because more businesses embrace different cryptos in their transactions worldwide.
With a market cap of over $858 billion, crypto is among the best digital investments. Crypto markets like Coin Watch help you track the changes in prices of different tokens that you may be interested in. Here are some indicators to help you choose the perfect coin, whether you are a beginner investor or a veteran.
1. Linear Regression Channel
Charts and data provide valuable information when making buying, selling, or holding decisions. The linear regression channel shows an asset’s price fluctuation trend in the crypto market. Luckily, such information is readily available on charting platforms. This channel has a lower and upper bound and a median trend line between the two.
The median trend line is usually straight and best suited for the last 100 price points. The upper bound is the point of resistance where the asset’s price finds it difficult to rise above. On the other hand, the lower bound is a point of support that helps the price to bounce up.
From the descriptions of these three lines, when the price is at the lower bound, that is your buying signal. If it reaches the upper bound, this is your signal to sell. This indicator is ideal for swing trades aiming to profit from price swings in a few days or weeks.
2. Fear and Greed Index
This indicator shows you the sentiments in the crypto market. It works by generating a number between one and a hundred. If the score is lower, the market is in fear, and people are selling, causing the asset prices to drop. However, when the score is high, it shows that people are buying greedily, resulting in high asset prices.
This indicator is ideal if you want to track the market volatility and sentiments without information overload to help you make selling and buying decisions. This index is insightful and powerful for a trader because it lets you understand the best time to buy or sell your assets.
3. Simple and Exponential Moving Averages
Moving averages are calculated for a specific time, like in 50-day or 100-day timeframes. They are calculated from the asset’s past prices to reveal the general trend by handling short-term price fluctuations.
For instance, if the asset’s price is more than its moving average, this is an uptrend, and the moving average supports the price to reduce it. If the price is less than the average, this is called a downward trend, and the average acts as a resistance. Combining short- and long-term timeframes is advisable for more comprehensive support levels and insight when making a selling or buying decision.
Conclusion
These indicators are not without risk regardless of the insight they provide for crypto market investors. These technical analysis tools help you anticipate price changes in the crypto market and prepare for them. However, the predictions change because of unforeseen events. As you make your investment decisions, it’s wise to consider risks so that you only make decisions based on one indicator.