Bitcoin Technical Analysis
What is Technical Analysis?
Stemming from financial markets that involve trade, whether that be traditional stocks or cryptocurrency, technical analysis involves analysing charts and identifying trends so as to make the most informed decisions.
Technical Analysis and Bitcoin
With Bitcoin and other cryptocurrencies as volatile as they are, technical analysis is an equally difficult and exciting process. While trying to use technical analysis to sell and buy Bitcoin is highly risky in the short term, using it to understand long term Bitcoin price cycles with an investment mindset can help grow your wealth. There is a wide range of charts available online, including Cryptowatch and there is a simple price chart on our Bitcoin exchange, which is a great way to start as you enter the crypto sphere.
Bullish vs Bearish
Within technical analysis and the crypto space, you may have come across terms like Bullish or Bearish – but what does this really mean? In essence, these terms reflect changes within the market, with Bullish referring to a period of increases and Bearish referring to a continuing trend of decreases. It is thought that the term Bullish refers to the way a bull attacks an opponent by pushing its head up, whilst Bearish reflects the way a bear attacks an opponent by slashing its paws down. As you get more involved in cryptocurrency, you will definitely find many other theories or stories about where these terms came from.
The Candlestick Chart
Closely connected to Bullish and Bearish analysis is the Candlestick chart, a way of depicting financial data in a way that is clear and visually appealing. Where this chart gets its name however, is very clear, with the long rectangular shape resembling a candle with lines that represent the candle wick. As a whole, this candle shape represents a day’s worth of price data, and when it is coloured in, or green, it is Bullish, whilst if it is hollow or uncoloured, or red, it is Bearish.