Best indicators for crypto trading

What is an indicator?

An indicator is a model of price behavior, which helps traders predict a future market situation. Indicators can also be used to follow global news and other factors that affect an asset price.

There are a lot of indicators in cryptocurrency trading. They help traders forecast the dynamic of a particular asset. Below, you can find the best indicators according to most traders:

Moving Average

The Moving Average indicator analyzes the average price of an asset during a selected period of time. Notably, the indicator can be applied only to long periods as it is not sensitive to short ones.

The MA chart overlays with the current price chart. This allows traders to determine support (the price should not drop below this level) and resistance (the price should not exceed this level).

RSI (Relative Strength Index)

The Relative Strength Index shows the level of overbought and oversold conditions of an asset. The indicator is based on the past performance of an asset. It also estimates demand for the asset and the likelihood of a downward or upward correction of the price. The indicator has two levels, namely 30% and 70%. If the RSI is below 30%, the price is likely to increase. If the RSI is above 70%, the price is expected to drop.

Ichimoku Cloud

The Ichimoku Cloud is a tool, which is represented by 5 lines on the trading chart. These lines correspond to the average price levels recorded in various periods of time selected by a trader. An intersection between two lines is called a cloud. If the price is above the cloud, the trend is upward. If the price is below the cloud, the trend is downward. If the price and the cloud move in one direction, the trend is considered to be strong.

We have described several popular crypto indicators. Notably, none of the indicators guarantees 100% success. When trading, you should be attentive and carefully consider your future actions.