In this Bitcoin prediction analysis, users embrace the philosophy that data doesn't always tell the full story. Increases and decreases in prices may occur due to panic selling.
Among the three analyzes above, the approach that is most often used in analyzing the crypto asset market is technical analysis. Through this method, you can see price developments over several days, weeks, or months. The downside is that you can't find out the average for each 24-hour period.
Learn Candlestick Charts
To answer the weaknesses of technical analysis, you can do analysis through candlestick charts. Candlestick charts are charts that display information containing the prices of crypto assets required by the digital asset market.
Candlestick charts allow you to see detailed fluctuations in the price of a crypto asset during a single trading session and make comparisons over a longer timeframe.
There are two conditions that can occur in a candlestick chart. Candlesticks are green and red. Green candlesticks usually occur when prices are rising throughout the day. The thin line at the bottom shows the lowest prices recorded for the crypto asset during the trading session. While the thin line indicates the highest price reached.
The bottom of the rectangle shows the volume of the asset traded when the market opened. While the bottom line of the rectangle shows the price at closing. Conversely, when the price falls, the candlestick will turn red.
The principle of reading is the same, but with reversed conditions. The thin line above shows the highest price of the day and the line below shows the lowest price. The opening price is at the top of the rectangle and the closing price is at the bottom.
In reading candlestick charts, you can use a variety of theories. You can read about it in the article How to Read Candlestick Patterns for Beginners.
Alternative to Reading Candlestick Patterns
In addition to reading and knowing the types of candlesticks, there are two other ways that can be done to analyze the crypto-asset market to find out price trends.
Trend Lines
The technique used on-trend lines is to ignore anomalies and outliers in the price of crypto assets. Outliers in analysis mean data that has a value that is far from its usual value.
This technique is used to detect an upward trend if the asset continues to reach new highs or lows if there are indications that prices have fallen for several consecutive days.
Trend lines are generally combined with analyzing the shape of the candlestick chart. The combination can help to know whether the trend of a crypto asset will continue or end. This technique can make it easier for traders to make informed decisions about what steps should be taken as their short-term strategy.
Moving Average
The technique used on moving averages is to track the price of crypto assets over a certain period of time. Be it a week, 10 days, or 30 days. Comparing the average price movement over a certain period of time can help you to find out the new trend that will occur in the crypto asset. Apart from that, this technique also helps you in understanding the more significant growth and decline rates of crypto assets.