Crypto market trends narrows down to two important words, bullish and bearish. A bearish market trend is a negative/downward movement while a bullish is an upward/positive movement. Usually, the bulls position themselves in a way that attempts to create price surges by buying crypto. Hence, the bulls can most times be referred to as buyers. On the other hand, bears tend to pull market prices downwards by selling cryptocurrencies.

Variables that Uphold the Fundamentals of Crypto Charts

 Beneath both fundamentals their is an underlying idea behind grasping the technical analysis of crypto markets. Essentially, the idea behind market trends is summarized by Dow Theory. There are four variables that uphold the fundamentals of this theory. These variables are:

• All upcoming, existing and prior details of a market have already implemented into current asset prices.Therefore the market will take everything from here into consideration during the pricing of an asset. 
• Price movements are never and can never be random. The prices follow particular trends and these trends are often than not either short term or long term. 
• Important things put into consideration in a crypto market situation include multiple variables such as the past, current and future demands; as well as any kind of regulation that could have either direct/indirect impact on the market. 
• At all times the market analyst focuses on the price of an asset/coin rather than all variables that create a given price movement in the market.

Market analyst predict price movements behind a firm believe that market behaviors are likely to repeat themselves over time. In a financial market situation, traders are more likely to react a similar way presented with a given financial pattern. 

The Six Tenets of Dow Theory

However, to actually come up with sound price movement predictions, it is worth deriving a few aspects of sector rotation, so as to accommodate the movement of money, funds and digital assets from one industry to the next.The basis of sector rotation is the fact that crypto assets might or might perform similarly. Dow Theory acknowledges that market averages advancing beyond a particular significant high creates an upward market trend; that follows suit a similar advance of another moving average. There are six tenets to the Dow Theory.  

1.The Three Market Movements

Primary movement - a major trend that could last less than a year to several years. The trend could either be bearish or bullish.

Medium Swing - intermediate/secondary reaction and lasts between ten days to three months. A medium swing usually retraces primary price changes from 33% to 66%  since the start of the main price movement or the previous medium swing. 

Short Swing  - Also called minor movement,  they vary depending on the market speculation from hours to a month or more. 

Note that these movements could happen in the market simultaneously.

2.Three Phases of Market Trends

• Accumulation Phase - Period within which investors begin buying or selling assets against  general market perception. During the accumulation phase, asset prices do not change much because the related knowledgeable investors are in the minority.
• Absorption/public participation phase - During this phase the market catches on with intelligent investors and they follow their trend.  Massive following continue this trend until the market attains rampant speculations.
• Distribution Phase - huge market speculation due to limited asset supply, market prices begin to retrace because of knowledgeable investors distributing their asset holding to the market.  Once the price begins to fall, the volume follows suit. 
• 

3.Stock market discounts all market news

No sooner fresh information surfaces into the financial market; the market implements so as to discount pricing according to prevailing market conditions. The release of the news marks the change of prices to reflect the new information. The total sum of the market price is reflective of the fears ,hopes and expectations of all market participants. Meanwhile, the market integrates such factors as earning expectations, interest rate movements, major elections, productive initiatives and revenue projections. 

4.Stock market average must always confirm each other

An investor interested in a particular company A should analyze the performance of a given company B. Averages of either companies A and B should be moving towards similar direction;In case it happens that both averages are diverging, it could be a possible sign that the entire market trend might be reversing soon. 

5.Volume Confirms Trends

The Dow Theory considers volume both  an important and secondary factor when recognizing price signals in the market. The following two situations reflect how volume reacts during major trends: 

• During a downtrend, volume decreases with decreasing prices.
• During an uptrend, volume increases with increasing prices.

6.Market trends will always exist until definitive signals prove otherwise

Dow Theory holds that the market will follow particular trends despite ‘market noise’. Therefore determining a trend reversal is not easy in a trending situation. 

Conclusion

The Six Tenets of Dow Theory are only the tip of the iceberg when interpreting crypto charts. The probable future of financial market is contained within the folds of innumerable factors; Beneath which are deeper perspectives that define the market. Watch this space for more tips on understanding financial and cryptocurrency markets.