Crypto price analysis wisdom using basic Technical Analysis
Crypto price analysis wisdom using basic Technical Analysis

Crypto price analysis wisdom using basic Technical Analysis

By Greenchic | Investing and Trading | 23 Apr 2021


crypto price, ta, investing, trading

 A serious red day in crypto today!!

cryptocats


It’s a serious day in crypto with today everything in red.

 

crypto, cryptocurrency, price

Taken from https://www.coingecko.com/en

My Mom feels it’s a great time to purchase cryptos at a time like this, when cryptos have experienced a good correction and are available to purchase at a discount.

She’s a HODLer, who prefers to make profits during bull times like these rather than bother about these corrections that happen from time to time, so she is chill like we are in this picture.

cryptocats


Although she is very much itchy to find out what’s on crypto news about today’s Red crypto phenomenon. However, that can be done only after she finishes this article script that’s of course going to be narrated with the help of us feline creatures - crypto cats.


 Using Technical Analysis and analysing crypto price action

 

 Bitcoin and Alt coin Dominance

 

Here is how my Mom reads crypto charts, analysing the crypto market using basic Technical Analysis (TA).

First, it’s good to check on Bitcoin and Altcoin dominance. Now, BTC dominance(BTC.D) has been diminishing since the end of March from 60 to 52 now and Alt coin dominance has gone up from 40 to 48.

bitcoin dominance, cryptocurrency
Bitcoin Dominance CHart from https://www.tradingview.com/

This means that Alternative crypto coins are dominating the crypto market cap with investors investing on them bringing about an ALT season which is a time when ALT coins outperform Bitcoin in price performance.

Alt dominance
Altcoin Dominance chart from https://www.tradingview.com/

My crypto investor Mom, is looking at these charts to predict when an end to the Alt season would come in a happening bull market like this. The chart shows that in the last bull run the Alt season peaked at 63 on Jan 8, 2018, then the ALt dominance kept falling. Therefore, ALT coins still have room to grow in this bull run until it peaks to 60 dominance range. Then perhaps, the bear market phase would begin like last time.

Now, let’s see some ways of analysing these various crypto price actions.

The point where exponential price rise halts due to profit booking

Every crypto price currently experiencing an exponential price increase will reach a point where the continuing uptrend in price comes to a halt. This is because investors would want to book profits. So, as investors, we have to understand that at some point prices would decline after a serious uptrend.

cat, crypto


When Crypto prices have risen up very high at some point it would correct - understand?

Now, in various crypto price charts one can spot such price exhaustion points. It is the point where the wick of a crypto price candle is very elongated, it signifies that price is not able to go up more for that crypto. This point marks a good point to book profits.

Check out this chart below -

crypto, cryptocurrency, price, technical analysis


Notice the sell off that happens after DOT tops out at the price of 47$.

 Strategy to sell high and buy back asset after a good price correction

Here what one can do at this point is book profits selling a portion of your crypto, and wait for a correction to buy back those crypto coins at a discounted price. Patience is needed for this, as it can take time for the price to experience a good decline, till then the price may just go sideways.

One should make note of the volumes too, declining volumes after a good price increase phase signifies end of the current bull run.


Buy the Dips

 

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Cat Meow on the ground level - Buy cryptos at dips when their price falls to lower levels

Now, at what price should one buy back the sold coins? . That price depends on the support levels of the crypto price. For ex- Dot’s support level here was 31, beyond this whenever the price of DOT has fallen down, it’s been brought up.

The elongated red wick of the price candle which has been circled signifies that price has bounced up again, as DOT was immediately bought up at that price.


During a bull market like one we are in, it’s good to buy back cryptos at dips. Generally, whenever a crypto falls beyond its 50 Exponential Moving Average (EMA), one can buy the dip as has been happening with DOT crypto.

crypto, cryptocurrency, price, technical analysis
THeta Price Analysis chart - check out the dip, price fallen below 50 EMA and RSI is over sold


 50 EMA Dip buys are good when one is inside a bull market

However, please note, this scenario of buying dips whenever price falls below 50 EMA is applicable only when we are in a bull market, like now. If we go into a bear market price may fall down below the crypto’s 200 EMA itself, that is why we must get out in time. An easy way to do this is keep booking some profits at price tops, so that we keep getting profits on our investments.


Also make note of the RSI, now DOT looks quite heavily oversold after a price decline.

 

When Resistance is broken to the upside - The sky is high(:

One can also note that after the price of DOT has broken a resistance level, the price has risen further till it touched another resistance level that newly gets established. This year Alt coins have been reaching new price level highs, making price discoveries just like DOT has been doing here.

When a resistance level is broken, that resistance level turns into support. This can be seen in many instances in DOT where it’s price finds support at it’s previous resistance level.

 

Well, let’s recap cat style - shall we?

cat, pet, nature, photography

See my support level here(:

There is definitely going to be a price Top, a limit where upward price momentum halts, that’s the point where people sell off and book profits.

crypto, cryptocurrency, price, technical analysis
Decred Crypto price Analysis


Price will stabilise at a bottom which can be at earlier support price ranges. Remember previous resistance becomes support.

One can sell cryptos at the top and buy back after it experiences a good correction.

Well, we crypto cats hope you enjoyed this show, my Mom has to study crypto news now, so see you in another article.

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Greenchic
Greenchic

I love to write on things I am passionate about - environment, citizens activism, crypto and life in general. I am a cat enthusiast, nature lover. I am excited to engage at the Publish0x platform by reading and writing crypto and other content here.


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