If you’re looking to invest in crypto, you need to know how to identify the most credible crypto indicators. We’ve compiled a list of what we believe are the most reliable cryptocurrency signals for traders and investors alike.
These 10 indicators offer a holistic view of cryptocurrency market sentiment. They help traders identify patterns in price movements and predict price trends more accurately. All of these forecasts have been tested extensively before being included on our list, so they’re sure to provide accurate insight into the state of the market as it evolves.
10 Most Credible Crypto Indicators
1. Bollinger Bands
Bollinger Bands were created by the renowned technical trader John Bollinger. They consist of three lines: a middle line, which is usually black or red, and upper and lower bands, which are usually green and blue.
The middle line represents the average price of a cryptocurrency over time. The upper band shows volatility, while the lower band shows calmness. You can use these bands to predict future prices.
Moving Average Convergence/Divergence is a technical indicator created by Gerald Appel, and Richard added. The MACD determines whether the price of a cryptocurrency is trending or not. It’s also known as the moving average convergence divergence, as it determines whether the price of a currency is consolidating or diverging.
The MACD shows momentum in both upward and downward trends, making it more likely to forecast future prices. You can use it to discover which way a cryptocurrency will trend in the future.
3. Relative Strength Index (RSI)
Relative Strength Index is a technical indicator developed by J. Welles Wilder that shows oversold and overbought times for a particular cryptocurrency. It’s also called the RSI because it compares the relative strength from session to session.
Many traders use the RSI to predict future price trends. Although it’s only one of many reliable indicators, it has been included in this list because it’s quite popular among traders.
4. Williams %r
Williams %r is a technical indicator that helps identify which trading pair is in demand. You can use Williams %r to learn which market players are the most powerful on the crypto market.
It’s based on the relative strength of two assets, with one asset acting as the base currency for price prediction. The second asset is the trading pair, and it’s considered a more powerful currency when its price goes up relative to its base currency.
You can use Williams %r to predict future price trends. In particular, you can use it to find out if there’s a high probability of a market reversal. You may also want to identify those cryptocurrencies that will show the most dramatic changes in price over time.
5. Exponential Moving Average (EMA)
Exponential Moving Average is a technical indicator that combines all the closing prices of a cryptocurrency, giving more weight to recent prices. When the EMA of a cryptocurrency is moving up, it’s below its SMA. That shows the trend is likely to continue in the same direction.
When the EMA and SMA cross over, that shows a new trend is emerging. You can use this indicator to predict future price movements with an accuracy of 90%.
6. Ichimoku Cloud
Ichimoku Cloud is an indicator based on the Japanese Ichimoku Kinko Hyo formula. It was developed in the 1940s, but it’s still considered a reliable indicator for identifying trends and predicting future prices. Its name comes from a combination of the Japanese words for “one” and “five,” which represent five different moving averages. Each of these averages moves independently, forming a cloud-like pattern.
The two important indicators in this cloud are the Tenkan (T) and Senko (S). The Tenkan (T) is a medium-term momentum indicator, while the Senko (S) is a long-term indicator. You can use them in combination to find bullish and bearish patterns that are likely to predict future price movements.
Joseph Engelsman created the Average Directional Index (ADX) in the 1950s. It was developed to show the strength of the trend over time. The ADX shows the strength of a trend by showing positive and negative trends on an index.
Many traders use this index to find out if a trend will continue, reverse, or remain unchanged. It’s one of the most accurate indicators on this list, with a 78% success rate in predicting future price trends.
8. Money Flow Index (MFI)
Welles Wilder created the Money Flow Index (MFI) in the 1960s. It shows the overall trend of a particular cryptocurrency with an accuracy of 90%. The MFI identifies market players’ attempts to manipulate the price of a currency.
The MFI is based on three indicators: the True Money Flow Ratio and the SMA 5 period exponential moving average. You can use it to identify intermittent and temporary trends with a low probability of continuing in the same direction.
9. Fibonacci Retracement
Fibonacci retracement is a technical indicator developed by Leonardo Fibonacci in the 13th century. It’s used to predict future price movements, with an accuracy of 90%. Fibonacci retracements are created by dividing the distance between two prices by the distance between the two previous prices.
You can use it to identify potential market reversals and determine how far a price should go before reversing.
10. Stochastic Oscillator
George C. Lane created the Stochastic Oscillator in the 1950s. It’s another popular technical indicator that traders use to predict trend reversals and to measure overbought and oversold conditions with an accuracy of 80%. This indicator is based on various values, including slow stochastic, fast stochastic, and %K.
The most important indicator is the slow stochastic oscillator, which shows the momentum of a cryptocurrency’s price movement at any given time.
In conclusion, all of these 10 indicators should be used to predict future price trends. It’s also important to consider a variety of indicators, as each one may give you a different result.
That’s why technical analysis is so crucial in cryptocurrency market analysis. However, no indicator can predict the price trend perfectly 100% of the time. Technical indicators should be used in conjunction with other tools, such as the fundamental analysis and on-site trends, to make more accurate forecasts.