Technical analysis works?
Questions about whether technical analysis actually works appear regularly every few days on forums, telegram groups and other places. They are usually asked by inexperienced investors or completely new ones. After all, how can a few lines make the price in a given place turn back, bounce or react in some way?
Bearing in mind that the wolves of Wall Street also know technical analysis (anyone can know it because it is not secret knowledge), everyone has an equal chance to see the same on the chart. We also have the same candles.
When we see the BTC chart, we can see that the latest rebound was easy to predict. The trend line across the candlestick lows showed the extent of the correction. Shown in the picture below.
The same is true of the topic covered in our education department; Technical analysis referred to as trend lines and channels. We will see that we can safely adapt some examples from technical analysis to cryptocurrencies. The chart is the same, only the stock instrument is different 🙂
Currently, analysts expect BitCoin to rebound and expect new peaks. However, in my opinion, long positions should be taken into account when the price breaks the designated trend line. In the case of a physical BTC purchase, the purchase should not be greater than a small percentage of the capital in order to have security in the event of a possible deep correction. If the price goes above the trend line, where the resistance is also broken, you will be able to buy BitCoin.
If you want to know the trend line, I paste below two pictures that show how to draw and how to determine channels. Full description in the section; Trend lines and channels