Technical Indicators

Technical indicators, which are utilized by traders who follow technical analysis, are heuristic or pattern-based indications generated by the price, volume, and/or open interest of an asset or contract. Technical analysts utilize indicators to forecast future price changes by examining historical data. The Relative Strength Index (RSI), Money Flow Index (MFI), stochastics, moving average convergence divergence (MACD), and others are examples of popular technical indicators.

Since the cryptocurrency market is still a relatively new asset class with scant historical market data, forecasts are more difficult to evaluate. Furthermore, attempts to accurately predict future moves have frequently failed due to the tremendous volatility of the cryptocurrency market. But given the volatility of cryptocurrencies, other indicators perform better. As an illustration, the On-Balance-Volume (OBV) is a fairly reliable momentum indicator for predicting price breakout directions. Additionally, it can assist in tracing capital flows from influential market participants or institutional investors. It examines a cryptocurrency’s overall trade volume over the previous days, weeks, and even months. It gauges the pressure of purchasing and selling cryptocurrencies.