“When to buy? When to sell?” This is the most concerning question for all cryptocurrency investors. Many people trade based on their feelings and end up losing a lot. As an analyst with years of experience in technical analysis, I want to tell everyone: although the cryptocurrency market is volatile, there are also rules to follow. Mastering these 3 core indicators will allow you to accurately grasp buy and sell points, surpassing 90% of retail investors.
The first indicator: RSI (Relative Strength Index). The RSI ranges from 0 to 100. It is generally considered that when the RSI is below 30, the market is in an oversold state and may rebound; when the RSI is above 70, the market is in an overbought state and may correct. However, I want to remind everyone that RSI should not be looked at in isolation, but in conjunction with price trends. For example, if the price hits a new low but the RSI does not, this is a 'bullish divergence' signal and a good buying opportunity; if the price hits a new high but the RSI does not, this is a 'bearish divergence' signal and a selling signal.
The second indicator: MACD (Moving Average Convergence Divergence). MACD is the core indicator for determining trends, consisting of the fast line (DIF), slow line (DEA), and histogram. When the fast line crosses above the slow line, it is a 'golden cross' signal, indicating that the trend may reverse upwards; when the fast line crosses below the slow line, it is a 'death cross' signal, indicating that the trend may reverse downwards. Additionally, the changes in the histogram are also very important; if the histogram changes from negative to positive, it indicates that the buying power is increasing; if it changes from positive to negative, it indicates that the selling pressure is increasing.
The third indicator: support and resistance levels. A support level is a price point where a decline may find support, while a resistance level is a price point where an increase may face resistance. There are many methods to determine support and resistance levels, such as looking at previous highs and lows, trend lines, and moving averages. I usually combine various methods for judgment; for example, if a previous high is broken, it will turn into a support level; if a previous low is broken, it will turn into a resistance level. Buying near support levels and selling near resistance levels can significantly increase the win rate.
Talk is cheap; practice is essential. Let me give you a practical example. In October this year, the price of Bitcoin pulled back to around $85,000, which was a previous support level. At the same time, the RSI was below 30, indicating an oversold signal, and the MACD also showed a golden cross. I judged at that time that this was a buying opportunity, encouraging community members to increase their positions. As a result, in just two weeks, the price of Bitcoin rose to $100,000, yielding over 17%. If you want to learn more technical analysis techniques, follow me @链上标哥 so you won't get lost! I will send you my practical course materials to help you quickly grasp the core methods of technical analysis.
