📊 What Is ATR and Why Crypto Traders Use It

The Average True Range (ATR) measures market volatility, not direction. It shows how much an asset moves, helping traders separate meaningful swings from noise.

Rising ATR: volatility is increasing

Falling ATR: market is calmer

How it works: ATR averages the “true range” over a set period (usually 14), capturing gaps and sharp moves that normal high-low ranges miss.

Uses in crypto:

Set stop-losses based on market swings (e.g., 1.5–2x ATR)

Gauge when price moves are significant

Combine with trends, support/resistance, or price action for context

Limitations: ATR doesn’t show direction or predict reversals — it only measures movement intensity.

Bottom line: ATR is a risk-management and volatility tool, helping traders navigate fast-moving crypto markets with smarter exits and clearer perspective.