Tuesday, July 8, 2025
  • About us
  • Economic Calendar
  • Price Predictions
  • Coins Alerts
  • Crypto Portfolio Tracker
  • Exclusively from Our Partners
Cryptheory
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
        • Binance Futures Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions
No Result
View All Result
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
        • Binance Futures Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions
No Result
View All Result
Cryptheory
No Result
View All Result

Cryptocurrency Technical Analysis – Can it be relied upon or is it a scam?

by Margharet Tess
September 27, 2021
in Attractions
Reading Time: 5 mins read

Table of Contents

  • Does technical analysis of cryptocurrencies make any sense?
  • Supports and resistances
  • Forecast of the future
  • How does technical analysis of a manipulated market work?
  • Why does technical analysis of a manipulated market work?
    • Let’s go through it step by step:
    • Well, wait, something like that exists – TECHNICAL ANALYSIS!

 

Technical analysis on the stock exchange
source: shutterstock.com/Author: shevtsovy

On this site, we often brag about analyzes, based on which we give various guidelines. But you may be asking: does technical analysis of cryptocurrencies make any sense? The whole analysis is not complete nonsense, because the market still cannot be predicted and who claims the opposite is a liar ?!

Does technical analysis of cryptocurrencies make any sense?

First of all, it would be useful to clarify what technical analysis is actually for. We often encounter the misconception that TA is actually an attempt to predict the future. This is partly true, but in a different sense than most people think.

The purpose of a technical analysis is NOT to determine how and where the price of the analyzed asset moves, but to estimate the most likely scenarios. Of course, we always have several options. Either it goes up, down or the value does not change. That’s why you’ll always find at least two arrows in a graph.

This bothers some people and claims that such an analysis is unnecessary because they are actually saying something that is quite clear.

Supports and resistances

Here comes the word support and resistance – that is, the price levels to which the analyzed asset will most likely respond. It either bounces off the level or stops at least for a while.

Revealing these reaction levels is very important because it gives us the opportunity to enter the market at the right time. Let’s say the asset is just above the strong support. In this case, it is advantageous to open the long (ie buy) and place the Stop Loss just below the support.

The price of the asset eventually moves and there is a good chance that it will go up, because the way down is “blocked” by a large number of orders. In this case, a much larger volume is required to move downwards.

RRR (Risk to Reward Ratio) is therefore advantageous for the long position. Most traders plot these supports and resistances in an attempt to identify profitable trades.

Forecast of the future

So when analyzing the market, you are not trying to predict the future and make a reliable prediction! It’s an effort to identify trades that are likely to turn out the way you want. Of course, this doesn’t always work out, but it doesn’t matter!

A professional trader usually has several such statistically advantageous deals open at once. How many trades must come out in order to be profitable then depends on your risk management.

Let’s say you open ten trades with a good RRR (to put it simply, consider only longs) and you went to each trade with ten percent of your capital. In each trade, you have a Stop Loss set two percent below the purchase price and a target 10% above it. So the RRR is 1: 5. If you get one trade, your portfolio will increase by 1%.

In this case, it is enough for TWO trades to come out!

  • 2 trades end successfully – you have earned 2% on them
  • 8 trades end in failure – you converted 1.6% on them

As a result, you are 0.4% in plus!

And that’s exactly what technical analysis is about. It is not an attempt to predict the price of a cryptocurrency. It is impossible. Almost all predictions fail. You make money on probability, not on certainty!

How does technical analysis of a manipulated market work?

But there is one problem. The crypto market is manipulated. As we mentioned in the first paragraph, some whales, exchanges and institutions have such a large capital that they have no problem significantly moving the price of any cryptocurrency. So we can analyze as much as we want, it still won’t work, because these players are doing what they want!

This argument has one serious error. Sure, some market players have the power to move the market. However, the plural is important here – PLAYERS!

Like us, they trade cryptocurrencies to make money. And none of them own enough coins to move the price at will. It is very important to realize that manipulation costs money. Millions, sometimes billions of dollars!

Why does technical analysis of a manipulated market work?

It is important to realize that no whale is on the market alone. There are always several (hundreds) of them and they definitely do not cooperate. Everyone counts for themselves in the first place. Imagine you are a whale. Your goal is quite clear – to make as much money as possible by trading cryptocurrencies. How would you do that?

There is an opportunity to buy cheaply, then manipulate the market so that the value of your purchased coins increases and finally sell everything at a profit. If you tried, you would end up very, very bad. Why?

Let’s go through it step by step:

  1. You can quietly buy a coin cheaply
  2. You start pumping it

And another ten big players, traders and half a retailer are waiting for your pump. They all start selling and you just give them liquidity so they can sell at a profit. Eventually, you may be able to pump your cryptocurrency by a few percent, but when you start selling, no one will buy it from you because it’s already high. So with the sale, the price will start to fall and you will not earn anything.

Such an approach to market manipulation simply does NOT WORK! And even if it works by accident, you still want to make as much profit as possible, don’t you? So you will use everything that will increase your success.

Hmm… I wish there was some way to identify possible market movements. Something that practically every trader uses and that would increase your chances of successful handling.

Well, wait, something like that exists – TECHNICAL ANALYSIS!

And that’s why technical analysis works. It is used by absolutely everyone from the smallest trader to the largest whale. They all sit by the graphs and draw lines in them. Everyone is trying to find a profitable trading strategy and make as many trades as possible with a good RRR. Trading is not a gamble, trading is a SCIENCE!

Top alternative exchanges for Binance without KYC verification

  • Author
  • Recent Posts
Margharet Tess
Margharet Tess
Editor, Developer at Cryptheory Labs
I have been active in the cryptocurrency world for over 6 years, during which I have written countless articles about this sector. What fascinates me most about cryptocurrencies is their technological aspect and the problems they aim to solve. In the past three years, I have ventured into app development and am currently working on a larger project called P2E Buzzer. Stay tuned for the surprise. 🙂 My previous experiences: Business2Community.com, TradingPlatforms.com
Margharet Tess
Latest posts by Margharet Tess (see all)
  • Bitcoin’s Ready to Blow… Upwards? - July 3, 2025
  • Ethereum’s $5K Dream: Breakout or Breakdown? - July 2, 2025
  • Ethereum’s Not Dead Yet: On-Chain Data Screams Rebound & Trading Tips - June 27, 2025
Tags: Analysis
Previous Post

According to the derivatives market, SOL has reached a short-term maximum

Next Post

BTC analysis – 9% growth still did not disrupt the correction structure

Related Posts

10 Brilliant Reasons I’m Still Holding My 2018 Altcoin Bag (And Totally Not Crying Inside)
Attractions

10 Brilliant Reasons I’m Still Holding My 2018 Altcoin Bag (And Totally Not Crying Inside)

July 1, 2025
The Centralized Trap: Is Web3 Quietly Turning Back Into Web2?
Attractions

The Centralized Trap: Is Web3 Quietly Turning Back Into Web2?

June 24, 2025
Staking: Is it Just a Fancy Ponzi Scheme? Let's Get Real.
Uncategorized

Staking: Is it Just a Fancy Ponzi Scheme? Let’s Get Real.

June 11, 2025
Who Really Makes Bank on Memecoins – And Why It Ain't You, You Beautiful Degenerate
Attractions

Who Really Makes Bank on Memecoins – And Why It Ain’t You, You Beautiful Degenerate

June 4, 2025
Let’s Be Honest: Most Crypto Projects Are Just Bullshit Wrapped in a Sexy Website
Attractions

Let’s Be Honest: Most Crypto Projects Are Just Bullshit Wrapped in a Sexy Website

May 15, 2025
Ethereum Is Just a Pricier Solana – Let the Maxis Rage All They Want
Attractions

Ethereum Is Just a Pricier Solana – Let the Maxis Rage All They Want

May 14, 2025
What Exchanges Won’t Tell You – Part 2: Staking Scams & Launchpad Lies
Attractions

What Exchanges Won’t Tell You – Part 2: Staking Scams & Launchpad Lies

May 12, 2025
What Exchanges Won’t Tell You: How They’ll Milk You Even in a Bull Market - Part 1
Attractions

What Exchanges Won’t Tell You: How They’ll Milk You Even in a Bull Market – Part 1

May 12, 2025
Why You Should NEVER Hire a Hitman on the Darknet with Crypto (Unless You Want to Ruin Your Life)
Attractions

Why You Should NEVER Hire a Hitman on the Darknet with Crypto (Unless You Want to Ruin Your Life)

April 30, 2025
Please login to join discussion
Track all markets on TradingView
Score: 0
Game Over

Popular

The Centralized Trap: Is Web3 Quietly Turning Back Into Web2?

The Centralized Trap: Is Web3 Quietly Turning Back Into Web2?

June 24, 2025
Bitcoin’s Ready to Blow… Upwards?

Bitcoin’s Ready to Blow… Upwards?

July 3, 2025
XRP Ain’t Dead: On-Chain Whispers and Trading Shenanigans You Can’t Ignore & Trading Tips

XRP Ain’t Dead: On-Chain Whispers and Trading Shenanigans You Can’t Ignore & Trading Tips

June 26, 2025
SOL's Big F***ing Breakout: Why Solana's About to Send You to the Moon

SOL’s Big F***ing Breakout: Why Solana’s About to Send You to the Moon

June 10, 2025
Ethereum’s Not Dead Yet: On-Chain Data Screams Rebound & Trading Tips

Ethereum’s Not Dead Yet: On-Chain Data Screams Rebound & Trading Tips

June 27, 2025
June 15th: The Altcoin Apocalypse or Your Ticket to a Lambo? Let's F***ing See.

June 15th: The Altcoin Apocalypse or Your Ticket to a Lambo? Let’s F***ing See.

June 11, 2025
Analysis & Trading Tips June 10, 2025: Dogecoin Is Barking Again

Analysis & Trading Tips June 10, 2025: Dogecoin Is Barking Again

June 10, 2025
Ethereum Is Cooking Again: Are You Gonna Ride or Cry?

Ethereum Is Cooking Again: Are You Gonna Ride or Cry?

June 30, 2025
Solana On-Chain Frenzy: New Addresses, Spikes, and Degens Running Wild

Solana On-Chain Frenzy: New Addresses, Spikes, and Degens Running Wild

June 12, 2025
How to Trade Meme Coins in 2025: A No-BS Guide for Degens and Smart Investors Alike

How to Trade Meme Coins in 2025: A No-BS Guide for Degens and Smart Investors Alike

June 9, 2025

💥 What's Your Crypto Trading Spirit Animal?

1. Your reaction to a red 15% candle?

2. How do you read charts?

3. What’s your biggest trading sin?

4. Favorite indicator?

5. How do you set your stop-loss?

6. What's your ideal trading environment?

7. How do you handle losing trades?

8. What’s your position sizing like?

9. What's your backup plan if you get liquidated?

10. Your crypto endgame?

Crypto News

Bitcoin

Ethereum

Altcoins

Cryptocurrency

Platforms for Copy Trading

Platforms for Grid Trading

Glossary of trading and crypto terms

Crypto Portfolio Tracker

 

Cryptheory Labs Projects

Guest Post for Free

On our website, you can share your opinions and insights. This feature is reserved for non-promotional articles. We are already working on a system for donations and rewarding every author.

This website is here for those of you who want to be at the forefront of innovation and new technologies like Bitcoin. But first, we need to tackle the challenges and survive in the unforgiving world of crypto assets. THIS IS CRYPTHEORY!

Follow Us

  • Terms Of Use
  • Privacy Policy
  • About us
  • Contact us

© 2024 Cryptheory - F**k the forex, we want gains!

Shiba Inu loading
No Result
View All Result
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions

© 2024 Cryptheory - F**k the forex, we want gains!

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.