How to recognize bulls and bear trends in crypto currency
Cryptocurrency, a digital or a virtual currency that uses cryptography for safety, has gained tremendous popularity over the years. With its volatility, great liquidity and broad adoption in various industries, it is not uncommon for investors to catch in excitement of this rapid developing space. However, the recognition of bull and teddy bear trends is crucial to making informed investment decisions.
What are bull and bears trends?
In finances, the trend is defined as a permanent form of prices that indicate the direction or power of the value of the property. In the context of the crypto currency, bull trends occur when prices grow rapidly, while bear trends happen when prices fall abruptly. Recognizing these trends can help investors make smart decisions to buy and sell, reducing the risk of significant losses.
Why identify bulls and bears trends?
Investors must understand both types of trends:
- Predict market movement : By identifying bull and bears, you can predict future prices movement and adjust your investment strategy accordingly.
- Minimize losses : Identifying potential falls helps investors to protect their capital by selling at the right time to lock your profit or drive a trend.
- Maximize gains : Bullish trends show that prices are likely to increase, providing the opportunity for investors to buy low and sell high.
How to identify bull trends in crypto currency
Bullish trends can be identified through different indicators and techniques of technical analysis. Here are some key measuring data to be careful about:
- Relative strength index (RSI)
: measures the size of the price of price, with RSI value above 70, indicating over -excessive conditions and value below 30 indicates the turmoil.
- Moving average : candles crossing above the previous candles indicate a bull trend, while they cross below indicate a bear trend.
- Bollinger Bands : This technical indicator shows the movement of the average with respect to the standard deviation values to identify volatility.
- Support and resistance level : Identify areas where prices tend to reject, indicating potential support or level of resistance for future prices.
How to recognize the bear trends in the crypto currency
Bear trends can be recognized through similar indicators:
- Relative strength index (RSI) : Value below 30 indicates bear trend.
- Moving the average : candles crossing below indicate a bear trend, while they cross up indicating a bull trend.
- Bollinger Bands : crossover between the upper and lower strips can indicate bear or bull trends.
- Support and resistance level : Identify areas where prices tend to reduce, indicating potential levels of support for future prices.
Tips to recognize bull and teddy bears in the Crypto currency
- Stay informed : Continuously follow the news of the market, technical indicators and basic analysis to stay in front of the curve.
- Use more indicators : Combine different indicators to get a comprehensive display of pricing and identify potential trends.
- Be patient : avoid making impulsive decisions based on short -term price fluctuations; Instead, focus on long -term trends.
- Diversify your portfolio : Spread investments in different crypto currencies and asset classes to reduce the risk.
- Set up stop orders : Establish a clear price level on which they will sell assets to lock your profits or cover losses.
Conclusion
The recognition of bull and teddy bear trends is crucial to making informed decisions on investing on the rapid developing market of the cryptocurrency.
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