Here, it is important to factor in high-volume price action, which can indicate the general momentum of the market. The greater the risk, the greater the reward. The challenge faced by the serious trader is to not let emotion dictate their trading strategy amid the deluge of hot takes and analysis by the media, chat rooms, or so-called thought leaders. These markets are highly subject to manipulation by whales. The “buy low” philosophy is quite apparent, given that the best time to accumulate within the market cycle is during the depression following a drastic drop-off in price.

What is their track record? However, since there is a lot of money at stake – and with the frequent presence of non-professional retail investors – the space is often subject to toxicity and warring factions. Community is critical to cryptocurrency trading projects. The combination of users, tokenholders and enthusiasts generates much of the driving force of these assets and their underlying technologies. How active are they in developing the underlying protocol of the token? Since many projects are open-source, it is possible to directly see this activity through collaborative code repository platforms like GitHub. What software ventures have they brought to market in the past? After all, there is always a social element to any new technology.

Those that can affect the pulse of the market. Knowing where you are positioned in relation to the whole is paramount. Do your homework, and be decisive in your cryptocurrency trading actions. You want to be the experienced surfer who knows when the perfect wave is about to arrive instead of paddling listlessly in the waters hoping for something great to happen. Being able to detect patterns and cycles in the market is crucial for having clarity from the macro perspective.

But, the micro perspective is also crucial in determining your actual strategy. Perhaps two of the most widely used TA indicators under the terms “support” and “resistance” relate to price barriers that tend to form in the market, preventing the price action from going too far in a certain direction. When prices decrease, traders tend to buy low, creating a support line. Conversely, the resistance is the price level where the upward trend tends to pause due to a sell-off. While there are a vast number of TA indicators, we will only go – link – over the most basic. The support is the price level where the downward trend tends to pause due to an influx of demand.