What Is Cryptographic Technical Analysis? 6 Technical Indicators Explained

In the second case, we consider the full distribution of returns that explain not only the central trend and spread of an asset, but also the entire aggregate behavior, including asymmetry, kurtosis and tails. In conclusion, we consider the observed data, that is, the time series of record returns that takes into account variations over time and allows us to identify when volatile or stable periods occur in each cryptocurrency. When it comes to technical analysis, some experience can be inherited from old financial markets. Many cryptocurrency traders use the same technical indicators that are seen when trading Forex, stocks and commodities. Tools like RSI, MACD, and Bollinger Bands try to predict market behavior regardless of the asset being traded. As such, these technical analysis tools are also extremely popular in the cryptocurrency space.

For example, in January 2020, Z Corporation, Inc. and TaoTao, Inc. announced a partnership with the financial services provider to expand the crypto market by confirming regulatory compliance in the Japanese market. Japan had recently accepted a new digital currency exchange during the COVID-19 outbreak. Similarly, the Malaysian Securities Commission has legally authorized digital currency exchangers to operate in the country, despite the nationwide lockdown due to the coronavirus pandemic. It can be expected that the effect of the COVID-19 outbreak may provide opportunities for this market to grow in certain economies.

According to the results, Bitcoin shows a lower relationship with other cryptocurrencies. Another approach is the use of random array theory and hierarchical structures in an MST in 119 cryptocurrencies, from 2016 to 2018 (Stosic et al. 2018). They find multiple collective behaviors in the cryptocurrency market, which contrasts with the intuitive idea that Bitcoin has a global impact on the entire market.

With Bitcoin, you might wonder if it will work as a medium of exchange and what sets it apart from money. Unlike fiat currency, which a central bank can print at will, Bitcoin possesses a fixed and predictable total supply volume. Before we dive into this statistic, we need to understand what the realized value means for a crypto asset. Market value, also known as market capitalization, is simply the total supply of coins multiplied by the current market price. Value realized, on the other hand, discounts for coins lost in inaccessible wallets. A similar part that has seen some popularity in the cryptocurrency markets is the NVT ratio.

Depending on the user’s control over the private key security feature, digital wallets are reclassified as a self-hosted or custodial wallet. In the secondary research process, reference has been made to various secondary sources to identify and gather information relevant to this study. Secondary sources are annual reports; press releases; investor presentations; white papers; certified journals and publications; and articles from recognized authors, directories and databases. The concept of cryptocurrency is based on decentralizing the monitoring of transactions. In this process, the system requires high computing power to validate transactions. To generate a hash code, the miner needs highly effective and efficient hardware.

For novice crypto investors, these tools can seem complicated, and sometimes they are. But technical analysis of cryptocurrencies can provide a window into price movements that can help you make better investments. Fundamental analysis, technical analysis focuses exclusively on price movements. But to understand price movements using technical analysis, you need to low market cap crypto look at factors such as past and present crypto demand, global regulatory regimes, and recent trends in the crypto community, among many others. In theory, technical price trends provide clues about market sentiment, not the other way around. The deeper you delve into cryptocurrency and less popular altcoins, the riskier you can expect your investments to become.