Technical Analysis and Bitcoin
With Bitcoin and other cryptocurrencies as volatile as they are, technical analysis is an equally difficult and exciting process. However, technical analysis is also crucial to making informed decisions when buying, selling or trading crypto and is worth understanding when you enter the crypto world. So what is technical analysis? Stemming from financial markets that involve trade, whether that be traditional stocks or cryptocurrency, technical analysis involves analysing charts and identifying trends so as to make the most informed decisions. There are a wide range of charts available online, including Cryptowatch, which are a great way to start as you enter the crypto sphere.
Bullish vs Bearish
Within technical analysis or the in the crypto space you may have come across terms like Bullish or Bearish – but what does this really mean? In essence, these terms reflect changes within the market with Bullish referring to an increase and Bearish referring to a decrease. It is though that the term Bullish refers to the way a bull attacks an opponent by pushing its head up, whilst Bearish reflects the way a bear attacks an opponent by slashing its paws down. As you get more involved in cryptocurrency, will definitely find many other theories or stories about where these terms came from as like Satoshi, no one really knows.
The Candlestick Chart
Closely connected to Bullish and Bearish analysis is the Candlestick chart, a way of depicting financial data in a way that is clear and visually appealing. Where this chart gets its name however is very clear, with the long rectangular shape resembling a candle and lines attacked the candle wick. As a whole, this candle shape represents a day’s worth of price data and when it is coloured in it is Bearish, whilst if it is hollow or uncoloured it is Bullish.
