In this way identifies reverse patterns in cryptocurrency price diagrams
The world of cryptocurrency was characterized by rapid price fluctuations and volatility. As a result, retailers and investors are increasingly dependent on technical analysis tools to make well -founded decisions on the purchase and sale of assets. Of the various indicators and patterns that can be used to predict reversal, the identification of reverse samples is located in the price diagrams.
What are the reverse patterns?
The reverse sample is a specific combination of price movements and price levels, which indicates a possible turning point or the reversal of the market market. In other words, this is a sign that the current upward trend or downward trend can end and a new trend is around the corner.
Types of reverse patterns
Different types of reverse patterns can be identified in the cryptocurrency diagrams including:
1.
2.
- Double/lower/lower pattern
: Two consecutive high -sized or two consecutive lows.
- Hammer pattern : A reverse pattern characterized by a small price movement followed by a large movement in the opposite direction.
How to identify reverse samples
Retailers use various technical analytical tools and techniques to identify the reverse patterns, including:
- Harizing Software : Programs such as Metatrader, Ctrader and TradingView allow users to create and display price diagrams.
- ZEit Frame Analysis : Traders analyze the diagram time frame (for example, 1 hour, 4 hours, daily) to identify the reversal patterns.
- Moving Average Values (MAS) : Merchants use MAS to identify trends by analyzing their relative strength (such as a stochastic oscillator).
- Level of Support and Resistance : Traders are looking for support or resistance areas in which prices have been historically reversed.
To identify the reverse patterns
Here you will find some tips to identify the reverse patterns in the cryptocurrency diagrams:
- Pay attention to changing trends : Note when the trend is often accompanied by a shift in the market mood.
2.
- Monitoring diagram indicators
: Use devices such as RSI (relative strength index), Bollinger bands, and stochastic oscillator to identify potential reversal.
- Keep the most important levels in the opposite : Monitor significant support for the price campaign and the level of resistance.
Example of reverse patterns of cryptocurrency price diagrams **
We analyze the example of the Bitcoin (BTC) price diagram between 2016 and 2021, highlighting several reverse patterns:
| Time frame Trend Support/Resistance
| — — —
| 2016-2017 | UP trend 16.00 USD- 19.50 USD
| 2018-2019 | Down Trend | $ 3.50- $ 4.20
| 2020-2021 | UP trend US $ 33,000-35 000
In this example, we can see that bitcoin price rose to $ 16.00 to $ 19 (2016-2017), which indicates a potential reverse pattern. Later, in 2018-2019, the price fell to $ 3.50-4.20, which indicates a new trend.
Diploma
Recognition of reverse patterns is essential for successful trade and investing in cryptocurrencies. By monitoring the diagram indicators, time frame analysis and key levels, retailers can identify possible reversal before they are recorded. Do not forget to pay attention to changing trends, consolidation times, and support/resistance levels to make well -founded decisions on the purchase and sale of assets.
