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Must Know Bitcoin & Crypto Technical Analysis Indicators – Cryptocurrency Explained – Free Course

November 3, 2019


welcome to cryptocurrency explained in this lesson I’m going to be explaining some of the most common technical indicators that will help you in your journey things like reading candlesticks and some of the common trading tools in order to be able to help you make your investments wisely learning how to read the charts is an important part of any cryptocurrency investing journey because it will help you to be able to understand good entry points in order to be able to maximize potential returns cryptocurrency investing is a risky business in fact it is famous for being risky the tools presented here are intended to help you find the best time to make an investment but they can also be used for more active trading though please do understand that day trading carries considerable risks in a highly volatile crypto market and that 90% of people trying to day trade lose money because they have not taken the time to learn what they are doing if you want to trade frequently it is highly recommended to either start with pretend paper trading like yeah seriously get a pen and a paper and write down the buys write down the sells write down the targets write down the reasons for entering the trade or only put a very small amount of money in in order to get used to the mechanics and the trends and how to use the different tools of the market efficiently you have to be hungry for it you have to spend a lot of time learning and planning your strategies most people fail to do this and they get rekt also understand that this is no crystal ball technical analysis helps understand common trends and acts as a predictive tool but some of the biggest gains in the crypto economy come from finding projects with strong fundamentals and holding on to them for a longer period of time I’m going to cover a lot of important information in this video you may want to stop frequently in order to take notes there are many different indicators of many different moving pieces in this video I will only cover a few of the more important ones but there is a lot more to learn than what is going to be covered here we’re gonna need a few different things been looking at some of these indicators one of them is trading view calm now on trading view calm you can look at all kinds of great charts for many of the major crypto currencies of course we’re looking at BTC USD in this particular one so I’ll go ahead and look that up there and I’m gonna go to the full featured chart so we can go ahead and get the volume indicator set up here so we can come up here and click on indicators and want to type in volume so this is one of the most common indicators that people do look at so you can see it’s coming down the bottom here we can see when there’s been times of very high volume times of much lower volume for example back in November we had very low volume we had very high volume read volume so as big selling volume back here on November 20th and we could see that we had high buying volume for example in the 19th of December the 20th of December but we’ve had rather lowest volume over the past few months so we don’t see big volume spikes that are happening but when you see a big candle you do see a bigger volume now we’re usually talking about volume in the 24 hour time frame and volume of course is just how much of a crypto currency has been traded in that given time frame measured in dollars or yen or pounds or even in Bitcoin depending on what you’re looking at in terms the chart so if we were looking at a Bitcoin aetherium chart for example what we would see the volume measured in Bitcoin not in US dollars so it’s important to keep those things in mind when you are looking at the charts that it can change a little bit depending on these different factors now volume is good because it is a leading indicator and it also tells us really important information about liquidity now liquidity is the availability of an asset in the marketplace for example bitcoin is very liquid it available on nearly every exchange but there are many crypto currencies which are only available in some very small exchanges with almost no one buying or selling that cryptocurrency so in this situation if you buy the cryptocurrency maybe very difficult to sell it back it’s usually best to avoid coins with little to no volume volume in the thousands of dollars is usually best avoided to put it in perspective bitcoins daily volume is in the billions now trading vidcom offers charts for some of the major crypto currencies but if you’re looking at some very small crypto currencies you’re not gonna find the charts over here on trading view so we can go over here of course to coin market cap and we can see the 24-hour volume now look bitcoin has nearly ten billion dollars in 24 hours all Youm that means that it is very liquid so if you buy a Bitcoin it’s very easy to buy it because there are lots of sellers and if you’re selling Bitcoin it’s very easy to sell it because there are lots of buyers but let’s go down the chart a little bit I want to show you some examples of crypto currencies that have shockingly low volume here is an example mou AK $41,000 an out state number 82 on coin market cap and it’s got terrible volume that’s amazingly low amazingly low volume compare it to anything around it two central lands got three point seven five million Walton chains got around three million dollars so seeing mo a cup here is such tiny volume it’s not a quick point that I’d be jumping straight into I’d have to do a lot of investigation if I know why is that volume just so gosh-darn low and of course we can come down here and see some other cryptocurrencies that are even the top 100 like Thor coin where’d this come from it’s got fifty eight thousand dollars in volume again terribly low low low volume that says to me that it’s not I want to go jumping in because it might be really hard to get out of it whereas with a lot of other cryptocurrencies you see Komodo $860,000 that’s some pretty decent liquidity without a doubt but it’s nothing of course compared to the top coins with massive liquidity some of them in the billions of dollars many in the hundreds of millions that brings us on next to the topic of market cap now essentially this is the price per coin times the circulating supply so you can see the Bitcoin here the price per coin today is three thousand nine hundred forty eight nine dollars that means that the total market cap so we take three thousand nine hundred forty nine times 17 million five hundred eighty one thousand four hundred twenty-five and that gives us the number sixty nine billion four hundred thirty three million one hundred thirty nine thousand and twenty-eight dollars so that is essentially at its very basic what market cap is so this red number represents the total value that has been decided by the market many people though do like to chase after coins that cost under one dollar or coins that have a low total supply for example but market cap is a very important thing to take into consideration because it tells us a lot more than if a coin costs a penny and or if they’re only a film few million of those coins because it can show how much profit potential there actually is in terms of growth and look the entire crypto economy is undervalued versus the potential of this market to grow in size so even investing just in Bitcoin for example can offer amazing returns over the next ten years for example but for some people they want bigger growth in a shorter amount of time and so they go looking for crypto currencies that have that better profit return potential let’s have a look at an example X RP we can see x RP here now X RP has a market cap of nearly 13 billion dollars now you’ve seen the x RP market cap much higher than that in the past and so there is still room for x RP to go back up to its previous all-time high around $3 that would not surprise me to see that happen at all or maybe even beyond that maybe we’ll see a $5 XRP but the CX RP being a $1000 coin well that doesn’t actually make sense because again you have to look at the supply of x RP versus the unit price and that would be immensely large it would be too big and so you really have to keep in mind what these numbers actually mean and it helps you set realistic price schools so looking at X RP and thinking well Khaleesi that a $3 maybe even $5 someday in the next bull run yeah I think that would be very possible but if you’re looking for things that are bit farther down we can look for example down at Z cash now Z cash is trading for around $50 there’s only six million Z cash now the per unit price is much much higher obviously than one x RP 1xrp is only around 30 cents but there’s billions of them right so what we’re looking at here is the market cap potential so if we were to imagine that Z cash was to go from it’s 300 million dollar market cap up to a three billion dollar market cap $500 per z cash that’s not actually that crazy when you think about it and that’s a 10x gain so for every 50 bucks that you put in you buy 1z cash we can take out four hundred and fifty dollars in profit as its had a 10x increase in the overall market cap and that seems a lot more likely to be able to happen because the market cap is much smaller now if we imagine x RP having a 10x growth that means it has to go up to a hundred and twenty billion dollars that is a much bigger distance to cover in terms of money coming in and going into x RP so the profit potential is potentially bigger for Z cash potentially of course and then we can of course come even farther down the list and have a look at other cryptocurrencies and think well maybe they have an even bigger chance to grow let’s look at Raven coin for example let’s imagine that Raven coin gets a market cap of three billion dollars well that means that you would have made three times as much money investing in Raven coin as you did in Z cash and potentially of course a much bigger profit potential and investing in something like X RP which has a much higher market cap and of course a potential bigger profit gain and investing in Bitcoin which also has the biggest market cap in the crypto economy now the farther down this list you go of market cap the higher risk cryptocurrencies you find many people invest in Bitcoin because they see it as the safest cryptocurrency to be investing in due to its history security value propositions and all these different things whereas some of these other coins are much riskier investments and so while Raven coin may go to three billion dollars it may go down to ten million dollars and you’ll lose lots of money so that is definitely something to keep in mind and I think market cap is such an important thing versus the per unit cost of a coin because if you take a hundred dollars and you invest it into cryptocurrencies and you have a 20 percent gain on that hundred dollar investment well it doesn’t matter if you made that 20 percent by investing in XRP if wex our Pisa goes up by 20 percent you still made $20 or if you invest that hundred dollars in the Z cash and Z cash goes up by 20 percent you still made $20 or you invest $100 into Raven coin and Raven coin goes up by 20 percent you still made $20 the question is what has the bigger potential to grow for many people it is though a very psychological issue looking for these under $1 coins but you have to keep it in perspective just because it’s under $1 doesn’t mean necessarily that it’s going to go up to a thousand dollars or four thousand dollars like Bitcoin is currently at remember Bitcoin at one point was under $1 as well so that’s what people want they want to recreate that kind of stellar price growth and there’s opportunities out there to make amazing investment opportunities but it’s just about understanding the real metrics here and the thing to keep a real focus on is the market cap okay on to the next bit and that is the order book now you’re going to find the order book basically on every single exchange we mentioned this very briefly back in our by Nance tutorial now the order book is essentially a ledger of all of the by and the sell orders on an exchange the green numbers those are the people who want to buy the red are the people who want to sell so the green of the buyers the red are the sellers so we can see here that the buy orders are for a lower monetary value than the people who are looking to sell their cryptocurrencies so the buyers want to buy it for less and the sellers want to sell it for more these are basic market mechanics now understanding how to look at the order book is really important because allows you to see how much and at what price a cryptocurrency is being offered or sought so there are two views for the order book the first here is the simple ledger view so we can see right now this is the etherium Bitcoin pairing over here on Finance so we can see that one etherium is going for around 3 million Satoshi is three and a half million satoshis at the moment so we can click on this and we can see just all the people who are looking to buy so these are all the buy orders that you can see in up to a certain amount and then we can of course come over here and look at just the sellers so these are all of these sell orders that are coming in now we can also look at the depth of the market the depth chart this lets us basically interpret the information that is over here on the order book so we can see again the red blob here these are all of the people who are trying to sell aetherium and the green is all of the people who are looking to buy aetherium and we can see there are some pretty big walls here so if I am trying to buy some aetherium I am looking at this chart would probably wanted to put my price somewhere right around in here because I can look and see wow there’s this other guy here who’s looking to buy hundreds of Bitcoin worth of aetherium and little old me maybe I just want to buy a few hundred dollars worth well and I want to get it for a cheap for price but I can see that there are some big-money players here and if I can get my order in in front of them it’s more likely to be filled so that’s on the buying side it works the same over on the selling side as well we can see for example here that there’s some really big orders in to sell aetherium at a certain price so again if I’m trying to sell mine that I would want to put it just before these these big cliffs or walls as they are called we’re gonna go back over now to trading view calm and look at some more advanced indicators now we can actually use these over on by enhance if we want sue we can see here on by Nance if we look at trading view we can actually bring in some of these indicators in the same way that we’re gonna do it over on trading view but I’m gonna be using trading view just because it’s a little bit of a cleaner way to look at it but you can use these same indicators over here so that it’s definitely worth keeping in mind if I want to for example put a volume chart and over here on by Nance that is really easy to do and you can do that so you have these features natively on almost every cryptocurrency exchange but we’re gonna be looking specifically here at trading you just keep it a bit clean now I want to explain first Japanese candlesticks or simply candles as they are called so you can see that the green and red bars here look like candles now each candle represents the price movement within a certain period of time now that could be one hour one day one week one month one minute it is represented here now I’m looking at the one day so each one of these bars represents a 24 hour time period now the body of the candle represents the open and the close price during that time period the wick or the little shadow here the little line on either side of most of these candles represents the highest and lowest price paid during that time period so we can see a few examples here candles represent a closing price that is lower than the previous time period and a green candle represents a higher closing price than the previous time period or basically red candles is the price going down and green candles is the price going up we can see some very basic things here so let’s just look at a few candle examples so here on the 4th of March we see that the opening price was around three thousand seven hundred eighty seven dollars people by the end of the day though the price had gone down to around three thousand seven hundred dollars now we can also see that little wick here so the highest price paid on March fourth for Bitcoin was around three thousand eight hundred and five dollars and the lowest price that anyone paid was three thousand six hundred seventy three dollars so that was a red candle that means that on the 4th of March the price of Bitcoin went down now on the 5th of March we opened at three thousand seven hundred dollars approximately which is where the previous candle basically finished so that’s the opening price and it’s a green candle because by the end of the day the price was higher so we had three thousand eight hundred and forty-five dollars we can see here as well of course then that wick is coming off the top of our green candle and there’s someone at some point during that day paid around three thousand eight hundred seventy four dollars and the cheapest price that anyone got Bitcoin for on the fifth of March was around three thousand six hundred and ninety five dollars now this is just the super basics of how candlesticks work there are some much more advanced concepts relating to them and what specific candle patterns mean but I’m not going to be covering any of those in this beginner course so if you are looking for that I would definitely recommend checking out for example investopedia or getting a little more serious in checking out trader Cobbs courses on how to understand crypto currency trading now we’ve already looked at volume and I’ve taken that back off of the chart the next indicator that I want to look at here is moving averages so how are we gonna get these setup we’re gonna up here two indicators and we’re gonna just put in MA and that gives us moving average and we’re actually gonna need two of these now I’m gonna go over here to the little gear icon and click on settings now the length that I want to put on this one is 20 so that’s 20 days 20 days here and you can even adjust style as well if you want to make the lines a bit different or thicker for example I like to have thicker lines to be honest so we’re gonna set the first foot up on a twenty day we’re gonna set the second one up on fifty damn you can make this one green get nice and thick there set that for fifty days okay there we go we can zoom that out just a little bit there so we can see these indicators how they’re following along with the market so this is the 20-day moving average in the 50-day moving average of the price of Bitcoin versus US dollars now there are some traders that work with even much shorter moving averages and some people work with longer moving averages for example the 50 and the 200-day can be popular with someone but we’re looking at the 20 and the 50-day this is for looking on that slightly shorter time frame but still looking at the the daily trends in the price of Bitcoin so we’re just gonna zoom out here on a bit of a wider time frame to see what the overall trends have been and you can look at this and kind of realize how this indicator works so we can see the red line here when we had these big run ups the red line was consistently on top of the green line now what did that mean so the red line here is the 20-day moving average that meant that this was a good time to be selling and taking profits because we had good bullish momentum then we could see for example that we saw this crossover so the red line went below the green line here so for a lot of traders this is one a lot of people started exiting the market after the last big bull run because they looked at that and said okay the bullish momentum it’s kind of finishing for the moment so I’m gonna sell now so a lot of people were selling at that point they took that as a strong indicator that they should sell their positions so if they hadn’t sold already over here they would have started selling here and a lot of traders would have started selling along here when the trend reversal started happening but this was more of a confirmation of that trend reversal and then the price of Bitcoin of course went strongly down now those are people who are selling right along this from here probably way down into this area but down here this is a different situation this is a time when you can come in and buy Bitcoin and play that volatility because there were people who are here buying it for around $9,000 and who are turning around and selling it for ten thousand five hundred dollars a week later so we could see that that trend reversal again happening just here where we did hit that bottom and we started to move back up and then we crossed over very briefly into that slight moment of bullish momentum a lot of people would have been selling right around this point so we can see basically when we see the red line being above the green line that can indicate a good time to be selling your position when we see that red line the 20-day moving average going below the 50-day moving average which is represented here with the green line that can be a time perhaps to get out of your position if you haven’t done it already as it’s indicating that there is bearish momentum in the market at that time or if you see these these trends bottoming out it could present a good opportunity to buy in to a given cryptocurrency the next indicator we’re looking at is one of my favorite navigators and that is the Bollinger Bands now this is a very effective tool for finding buying opportunities sell points and understanding the volatility of the market so we’re gonna go here to trading view and we’re gonna go to indicators and we’re going to type in Bollinger great and so there are our Bollinger Bands now we can see with the Bollinger Bands we have this range around the prices so we have this blue bubble that is surrounding the cryptocurrencies with a moving average in the middle there now the thing to watch out for with the Bollinger Bands which makes them such an effective tool that when the candles get outside of the Bollinger Bands it can represent one of two things either a good time to sell or a good time to buy so we can see here for example back in July 2018 we saw some very strong movement in the price of Bitcoin we saw green candles outside of the upper bands of the Bollinger Bands this was a good time to be selling so people were selling here people were selling here this is a strong indicator that it is a good time to be selling because the market is over bought so there are too many people buying and that it may be a good time to consider taking some profits on your trades alternatively on the other side we can see when a cryptocurrency is over sold so that’s when there’s very strong selling pressure so we can see here for example back in November we did see these red candles going strongly below the lower bands on the Bollinger Bands so that meant that essentially this is a good time to look at taking a position that the cryptocurrency is actually oversold now you do have to watch out for other indicators as you can see here if you had solely looked at the Bollinger Bands you could have got burnt big-time because it just kept going down so there is no one indicator that is going to tell you everything you need to know about crypto currencies these are simply looking at trends understanding trends and understanding if those trends are something that you can take that knowledge in education and use that to trade moving forward another very interesting thing with the Bollinger Bands is that when we see the bands get thin when we see them tighten like we did here that starts to indicate that one of two things is going to happen that there’s going to be a big movement up or a big movement down we can see in this situation that the movement was indeed a downward movement but we can see currently that we do have this tightening again on the Bollinger Bands so we’re seeing a bit of a steady upward movement but there are times when you can see quite serious upward momentum after a time of relative stability here in 2017 is a good example when we did see these tighter Bollinger Bands and then we did see a big big breakout upwards happening after that overall the Bollinger Bands can be a good tool for helping to spot those trends so we do see those tight bands well you know that there’s something potentially gonna be happening here very soon in terms of an upward or a downward movement and we can of course look at when we do see that green candle above the upper band potentially a good time to sell and when that red candle is below the lower band potentially a good time to exit a position or when we see that red candle below the lower Bollinger Band a good time to potentially be buying in to that cryptocurrency if you’re looking to take a position in it the next tool we’re gonna be setting up is called the MACD so we’re gonna go up to indicators and type in Macke ly okay so this is the MACD we have set up here now the blue line is our 12 day exponential moving average and the orange line is our 26 day exponential moving average again we have a simple to use and interpret tool here the bars above our baseline indicate the possibility of selling in the bars below our baseline indicate that we may see a trend reversal and to take profits if you haven’t already or to buy into position if you have been watching it so we can see here that way we see these green positive candles here this is a good time to be selling and we see the strong red position here this is saying well you may want to be getting out of your position if you haven’t done so already if you haven’t taken your profits yet and you’re still in profit good time take profit or if you’re looking to get into a position this may be a good time to be looking at getting into a position and looking at the lines here basically when the blue line is above the orange line this indicates that there is a positive market momentum in the orange above the blue shows that we may be seeing a market correction or a more pessimistic trend starting to happen now across of the blue line over the orange line may indicate a good time to get into position and maybe a positive trend reversal in the same way that a cross of the orange over the blue may indicate a good time to get out of a position so we can see this happening here where we saw the blue crossing up over the orange and we can see similar situations here for example where we see the blue going back down below the orange line signaling that there is a trend reversal happening generally when we see a line crossing another line that is usually when we are gonna start seeing a trend reversal taking place so you can think of the MACD crosses as they are called like trigger lines so when we see this cross happen like we’ve seen just here usually something is going to happen in crypto when that happens here we see the orange line on top the blue line on bottom that potentially says that we are in a more bearish trend and you can see that that’s exactly what happened here with the price we did see these red indicators on the MACD but then we’re just hitting this point where we’re just crossing back over the blue line looks like it’s about to overtake the orange line once again indicating that we may be move back into a more positive moment of momentum the next indicate that we’re gonna set up is relative strength index or RSI over here and type in RSI relative strength index now the relative strength index is a very very easy tool to use basically it works like this when you see this line above the solid colored box that is a good time to be selling when you see the line below the solid colored box that is a good time to be buying potentially of course now let’s have to look at multiple indicators to try and confirm your opinion and try and confirm what is happening but generally we can see this playing out the main thing that it tells us is that when we see that line moving above the the solid box that the asset is at that point overbought that there are so many buyers a lot of exuberance in the market so we’re probably likely gonna see it’s a good time to take profits but also there will probably be a time in the not-so-distant future we do see a bit of a price cooldown where is when we see it being very strongly oversold you’re likely to see a situation where the price does rebound after that so that’s saying that there’s a lot of pessimism the market a lot of strong selling pressure happening in the market just the tip as well always watch out for news items sometimes a crypto is being heavily sold for a reason it may be very unwise to enter a position if for example the founder was just arrested for fraud or something like that so before entering trades make sure that you are doing your homework on the background situation that’s going on in that particular crypto as well now finally in our basic toolkit I want to discuss support and resistance now these are historical levels where crypto has either met resistance that is to say the price goes up up up until a point where there’s not really many buyers left that’s the market resisting a higher price and on the opposite end we see support be the lower levels where sellers are no willing to sell their cryptocurrencies for that price so the market supports that lower price we often see historical areas of resistance becoming new areas of support and when looking at entering a trade you can consider if a crypto is nearing an area of previous support or if selling if it is nearing a level of resistance these areas are often price barriers and can be good indicators in trying to decide entry and exit of positions so let’s look at some of these here as some examples here we can look back into earlier 2018 we can see some resistance levels that did get set up here now this here is one of the resistance levels we saw resistance happening here right around eleven thousand five hundred dollars which had been a level of support at least temporarily right along this level now that support did break and we saw the price tumble all the way back down to around here which again we can come over here and see was a previous level of support but it wasn’t a very strong level of support in that price it did go back down farther and we can see here that the lower price in this situation so that is the the bottom price that did happen that is where the support mechanism kicked in and we saw this five thousand dollar range being supported right here now we can see that this level did kick in again later so this around the seven thousand dollar mark we saw this happening over here as well where we did see this resistance around the seven thousand dollar level so you can really look at these numbers and get to understand how this works we do see these trends repeating themselves we can see here a great example of overall markets support we saw months where we saw the price right around $6,000 and $6,000 was kind of the lower support level that we were continuing to find so we can see a lot of places where that price was being enforced we can see here well you can see here we can see here and here and here until it finally broke over here so we did see a lot of support for that level so that was the support area and unsurprisingly if we go all the way back over here we can see that that support that was so strong here was at one point resistance back here and if we look at our resistance here in July 2018 we see that there is a price reversal right around here now we can go back and look historically and see that the same thing happened here in May we can go back and look and see that a very similar thing happened in April and of course we can go back even farther and see that we did see again this happening here so there is definitely a rhyme to the markets there are areas where sellers and buyers have historically been needing and those moments of meeting tend to rhyme and repeat themselves so it’s really good to get in tune with the at least the general idea of support and resistance and to understand how these trends work I know that’s a lot of information but actually this is a very basic overview of these tools in a very small selection of tools you will need to spend a lot of time learning and practicing to understand how to use them if you want to maximize the benefit of these tools there are a lot of great resources online to help you learn about the fundamentals of technical analysis investopedia for example is a great free resource which has a wide variety of information freely available but if you want to get really serious about learning the ins and outs of technical analysis then you’re going to want to put some money down on a structured course which will deliberately teach you the tools that you need to know in order to become a successful trader and be part of that 10% who profit one course that I can recommend is trader Cobb now this is run by my friend Craig Cobb now Craig has an excellent course in a fantastic community and has helped thousands of students achieve their crypto trading goals and you know Craig is offering a ten percent discount to my subscribers on any subscriptions just use the link down below thank you so much for watching this video make sure to check out the next video in this series to learn more about crypto currency and feel free to post any suggestions or questions that you may have down below in the comment section there you will also find my recommended list of exchanges and wallets and if you found this video useful please hit the thumbs up button and subscribe to the channel if you are new around here long live the blockchain and peace out the next daddy

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