Bears and cops – How we talk about the price of crypto currencies
Our price analyses include words that are not immediately understandable to everyone. Sometimes the Bitcoin price is bullish, sometimes the Ethereum price is bearish – we are talking about MACD, Resistance and RSI. So that also beginners can do something with these terms, here is a short explanation.
Very roughly broken down: If the price goes down, it is bearish (bearish), if it goes up, it is bullish (bullish). You can easily remember this figuratively: The bear strikes down with his paw, the bull pushes up with his horns.
Bitcoin code – simply explained
The basic mood in the bear market is therefore ultimately negative with regard to the Bitcoin code trend – it goes downhill. When this bear market starts is not always easy to say – the mood in the markets can change quite quickly, especially the news can be important here. When, for example, last year China or this year South Korea announced regulations or bans, many Bitcoin code investors panicked – the mood was bearish overall. For investors, however, a bearish price does not necessarily have to be something negative: If you catch the right moment, you catch the bear at the right moment and buy yourself in, because at some point the market becomes bullish again. You can also bet on the falling price – that means shorting. How this works is explained here, among other things. At this point, however, it is about the counterpart – the long position.
In principle, the bull market is the counterpart to the bear market – things are going uphill. The mood is positive with regard to the price trend, one assumes that it continues to go up. Investors who have hit at the right moment are happy about rising prices. So far so good. But when does a bear market become a bull market and vice versa? This is where the terms resistance and support come into play.
Resistance, Support and the Bitcoin code
To keep it short: Resistance is the resistance and Support is the support of the Bitcoin code price. Both are levels in the course of a price where the price has had difficulty rising or falling in the past explained by onlinebetrug. The resistance prevents it from breaking further upwards, the support prevents the price from falling even lower.
So if the price moves towards these points, at such points a bull market can become a bear market and vice versa. He tests these lines – the more he turns on them, the stronger they become. However, if the price breaks through these lines, it is likely that the price will continue in the same direction.
The EMA, or exponential moving average, is a special form of moving average that takes more account of current price movements than older price movements. If the price falls below it, the EMA often acts as resistance, if it is above it, as support.
The MACD line stands for Moving Average Convergence/Divergence and focuses on the behavior between three moving averages. It gives information about the long-term price development. If it is positive, it is a bullish signal, if it is negative, it is a bearish signal. RSI, on the other hand, stands for Relative Strength Index and provides information on how the price has behaved recently. Thus, the RSI primarily tracks current trends. An RSI above 50 speaks for a bullish price development, below 50 for a bearish price development. Furthermore, an RSI can help to recognize trend reversals: An RSI above 70 speaks for an overbought market, while an RSI below 30 is considered oversold. Especially a low RSI has often been a harbinger of a trend reversal.
When should I buy now?
The technical analysis or chart analysis attempts to formulate an assessment from which further trading strategies can be derived. The basis for the trading strategies is the assessment of further price developments.
If the result of a technical analysis is a bullish assessment, the analyst assumes a positive price development. A long position or the purchase of coins, which are considered in the analysis, would be the basis of a further trading strategy. In the analyses a support is also given, which can be understood as a stop-loss or a kind of double bottom. If the price falls back to this level, one can think about disposing of the position: i.e. selling. The Resistance can be used as an estimate of how far the journey can go – it is a goal to where a price can go. Here you can set a target, a goal where the coin is sold profitably – or at least analyze the situation anew.