Knowledge base

Top Cryptocurrency Indicators

What Is an Indicator?

An indicator is a model of price behavior that traders use to determine how the market situation will develop. Indicators can also be used to monitor global news and other factors that may influence asset prices.

In cryptocurrency trading, there are numerous indicators that can help traders forecast price dynamics. Here are some of the best indicators, according to many traders:

Moving Average

The Moving Average indicator analyzes the average price of an asset over a specific period. It's worth noting that this indicator is calculated over long timeframes and is not sensitive to short ones.

The Moving Average chart is overlaid on the current price dynamics chart. This allows traders to identify support levels (the level below which the price should not fall) and resistance levels (the level above which the price should not rise).

RSI (Relative Strength Index)

The Relative Strength Index indicator shows how overbought or oversold an asset is. The indicator's operation is based on historical price data for the trading instrument. It then determines demand for the asset and forecasts the possibility of price correction either up or down. The RSI indicator has two levels: 30% and 70%. If the RSI value is below 30%, the price is likely to rise. If the RSI value is above 70%, the price is likely to fall.

Ichimoku Cloud

The Ichimoku Cloud indicator is a tool that appears as five lines on the price chart. These lines, in turn, are averaged values over different time periods chosen by the trader. When two lines intersect, the area between them is called the cloud. If the asset's price is above the cloud, the trend is considered bullish; if below, it's considered bearish. If the direction of the asset's price and the cloud align, the trend is considered strong.

So, we have discussed several popular crypto-indicators. In conclusion, we want to emphasize that no single indicator guarantees you 100% success. When trading online, rely on your own careful and well-considered decisions.