Six Crypto Trading Indicators for beginners - 1.2

Continuation of post 1.1.

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2. Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100 and is used to identify overbought or oversold conditions in the market.

How it works:

An RSI value above 70 typically indicates that an asset is overbought and may be due for a price correction. On the other side, an RSI value below 30 suggests that an asset is oversold and may be due for a price bounce.

Example:

If the RSI of Litecoin (LTC) reaches 80, it may indicate that LTC is overbought, and a price correction may be imminent. Traders may consider selling or shorting LTC at this point.

3. Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that consists of two lines: the MACD line and the signal line. It helps traders identify bullish and bearish trends and potential trend reversals.

How it works:

When the MACD line crosses above the signal line, it indicates a bullish trend. Conversely, when the MACD line crosses below the signal line, it signals a bearish trend.

Example:

Suppose you're analyzing the price of Ripple (XRP) using the MACD indicator. If the MACD line crosses above the signal line, it suggests a bullish trend, and traders may consider buying XRP. If the MACD line crosses below the signal line, it indicates a bearish trend, and traders may consider selling XRP.

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