This is the framework on which the price of cryptocurrency depends on, the highs and the lows. For any good trader to succeed in cryptocurrency, they must understand the technicalities involved with the constant change in the price of the currencies in the market

The ideology is that with proper study of the price history, a trader should be able to determine the current trading conditions and the direction of the price in the market. The use of technical analysis is based on the assumption that all the historical market data is somehow reflective of the present and future price movement. If the necessary price information is available then one would be able to deduce the direction of the market with confidence. As the popular saying goes, “history always repeats itself” , and that is exactly what technical analysis is all about.

Technical analyst will actively look for similar historical pattern and develop trade ideas around that, believing that it will behave in the similar fashion as it did before. This method has been used by successful traders to make profit just by understanding the patterns and looking profitable entry point.

When more and more traders rely on technical analysis and resort on similar chart pattern to develop their trade ideas, sometimes these price patterns will ironically become self-fulfilling

We can’t have technical analysis without a chart, charts are important because they create a visual representation of the price data and are used to spot trends, changes or any unusual patterns that can be the beginning of a huge trading opportunity.

Technical analysis is very subjective; just because two people are looking at the same chart does not mean that they will come up with the same idea in predicting the direction of the price.