In this blog, I am going to cover the analysis of the movement of various cryptocurrencies in order to find profitable situations for making profitable buy or sell trades. This analytics of the cryptocurrency markets expresses the personal views and assessments of the author, therefore all risks and responsibility for the trade decisions cannot in any way relate to the information presented. In addition, in this analysis I do not pretend to be the ultimate truth. Moreover, if, in the course of considering and analyzing market situations, you have additional proposals for improving the trading system, please, be free to express them for the general good in the comments to publications.
On the basis of which trading system is it planned to analyze the cryptocurrency markets? - First of all, simple analysis tools are used. To make a long story short, the analysis uses the awesome oscillator indicator, or rather the divergence based on this oscillator. Experienced traders know that divergence is a discrepancy between indicator reading and price.
For a better understanding of divergence, the following example can be given. The indicator is growing and at the same time the price also grows, but less than in the previous segment of the market. This situation testifies about the possible approach of falling prices in the market. And vice versa, if a new bottom has been formed on the chart and at the same time the indicator shows an increase compared to the same previous market segment, then it can be argued that the price is going to soar up. I also recommend inexperienced traders to find out more about the concept and phenomenon of divergence in the market from additional sources.
But the trading system itself, on the basis of which it is planned to analyze the market, is not limited to divergence. After all, as you know, divergence can be "broken", that is, the price can swing slightly in the predicted direction, and then continue its movement despite the divergence signal. Therefore, to confirm the reliability of the divergence signal, I plan to use trend lines, the breakout of which means the final and irreversible entry into the trade. The probability that the trend will continue to develop in the direction of such a breakdown greatly increases. Moreover, it is desirable that the breakdown of the trend line be rapid or at least not very sluggish.
As divergences appear at different timeframes, I am going to publish them up-to-date along with trend lines and forecast further possible developments on the cryptocurrency price movement chart.
In conclusion, as examples for clarity, I show several charts with divergences (indicated by green or red lines, depending on the direction of the signal). Also, on these charts, I drew trend lines (blue line), the breakdown of which increases the reliability of entries into a trade based on divergence signals. The direction of entering a trade is indicated by arrows.
Ethereum Classic (ETC), 15 minutes chart, a buy signal:
Ethereum Classic (ETC), 240 minutes chart, a sell signal:
Bitcoin Cash (BCH), 60 minutes chart, a sell signal:
OMG Network (OMG), 15 minutes chart, a buy signal:
OMG Network (OMG), 60 minutes chart, a buy signal:
