The support and resistance method gives a good measure of demand and supply of any major altcoin in the market.
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The support level is easily defined as the lower price level that traders are all ready to buy a currency at. So, if price drops so does the support price. Support and resistance The Resistance is the theoretical price at which coin traders are ready to sell the coin at.
This is just like a floor on the stock exchange and behaves similarly. So support and resistance are lower and upper price points in the dynamic setting of bitcoin and there is no actual measure of how to determine them but just by observing the market.
Now what the market does is that when it reaches the resistance price, it immediately bounces back up as buyer activity increases driving the price up. When it reaches the resistance point, the price immediately comes back because of increased selling trend. Mostly, support and resistance are only used for short-term day trading and are very effective tools.
Volume trading While most of the focus is on the price of the altcoin, the volume also plays an important role in the future of the altcoin.
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If the volume is low then the price would go down due to lack of investor confidence in a particular coin but if the volume is getting higher and higher than it shows an increasing investor and trading confidence and price is expected to increase in the coming hours. The volume of trading activity perhaps changes even more dynamically than the coin price itself and people are usually unaware of it.
Volume trading The volume trading is when you keep in mind the volume trends of a coin and make decisions accordingly. You have to account volume too.
Perhaps the traders are buying coins and holding it thus sucking up the volume of the market. If the volume is showing a negative trend, beware of buying that cryptocurrency especially if it is a minor one since their price is always tied to the volume as well. You can see what happens with them daily and monitor their volume and you will arrive at the same conclusion. Bollinger Bands The Bollinger band is a simple yet rewarding strategy that was devised from the stock exchange and modified for the cryptocurrency market.