Technical indicators in the cryptocurrency store: Case Study on chain (link)
In the world of cryptocurrencies trading, the prediction of movement prices is a key aspect of making informed investment decisions. Although market trends and news can play a significant role in pricing shaping, technical indicators offer a valuable tool for traders to analyze market data and produce more precise predictions. In this article, we will explore the importance of technical indicators in the cryptocurrency trade, with an emphasis on the chain (link), the leading decentralized Oracle network.
** What are the technical indicators?
Technical indicators are numerical values or patterns generated from historical prices or property data. Squares provide insight into market trends, momentum and potential shopping/sales signals. These indicators can be based on different time frames, such as minutes, hours, days or weeks, and can range from simple moving average to complex mathematical models.
The importance of technical indicators in the cryptocurrency trade
Crypto currencies, such as Bitcoin (BTC), Ethereum (ETH) and others, have gained enormous popularity in recent years. Lack of regulation and volatility make them an attractive investment for many merchants. However, the prediction of the price movement in the Crypto currency may be challenging due to different factors, including:
- High volatility of the market : cryptocurrency prices are known for extreme fluctuations.
- Limited data availability : Historical data in cryptocurrency markets are limited compared to traditional property.
- Complexity of Trading Strategy : Many traders use complex trading strategies that require significant expertise.
Technical indicators can help alleviate the thesis of challenges by providing tinted understanding of market trends and patterns. Analyzing data of historical prices, technical indicators can discover:
- Trend power : indicators such as a relative power index (RSI) and moving average (ma) indicate the power of trend, helping traders identify potential purchases or sales signals.
- Momentum : Indicators such as a stohastic oscillator and momentum indicate the level of momentum on the market, helping the traders weighing when they need to take positions.
- Support and resistance levels : indicators such as Bollinger Bands and Ichimoku Cloud help retailers to identify potential support and resistance levels.
LAANLINK (LINK) CASE STUDY
Chainlink is a leading decentralized Oracle network that allows developers to build a smart chain contract without relying on API’s or third-party mediators. As a key component of the Ethereum ecosystem, Chainlink has attracted significant attention and retailers and investors.
Why are technical indicators important for Chainlink (link)
As a cryptocurrency platform built on top of blockchain technology, Chainlink requires reliable and effective feed data to function properly. The decentralized nature of his Oracle network makes him vulnerable to interruptions or disorders in the data feed. To relieve the risk of theses, Chainlink uses technical indicators to ensure that its users have access to accurate and up -to -date prices.
Case Study: As technical indicators helped predict the price of price
In 2018, Chainlink suffered a significant interruption due to a faulty data feed, resulting in a temporary disorder in the Oracle Network. Because of this, prices on popular trading platforms fell for as much as 50% within a few minutes.
Using technical indicators, traders have been able to determine the potential cause of interruption and take measures to alleviate its impact. Especially:
- RSI indicator : RSI indicator helped the traders identify a strong sales signal, indicating that prices can continue to decline.
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