How to Use Technical Analysis in Crypto Trading

Cryptocurrency prices fluctuate within minutes and even seconds, which makes it difficult to plan investments and trading moves. That’s why specific indicators and charts (together called technical analysis tools) have been developed, helping navigate the current market situation and make forecasts. In this article, we explain in detail what technical analysis in crypto is, what parameters are included, and share the Bitcoin analysis as an example to show you the process.

What Is a Technical Analysis?

Technical analysis in crypto is a method of evaluating current and future price changes by using various market data. It is actively used by traders who see tracking moment-to-moment changes as important for successful trades.

The main approach of technical analysis is about focusing on price and the belief that patterns repeat over time, rather than concentrating on fundamentals such as technology. It could be even said that it researches market psychology and patterns in traders' behavior. Therefore, the technical analysis basis is reading charts and using technical indicators to help identify trends. Through this, traders seek to find entry and exit points that increase the chances of profitable decisions.

It is worth remembering that the crypto market is highly susceptible to news and innovations in the industry, so although technical analysis helps to predict price trajectories, it is also important to monitor changes in the market as a whole.

Parts of Technical Analysis

Technical analysis consists of several aspects. It includes:

• Price historical data. This is about how the crypto price moves in certain periods and changes over time. For example, traders note a steady increase in the Bitcoin price in the first year after halving, while all other cryptocurrencies, in turn, depend on BTC movements.

• Trading volume. The indicator shows how much of an asset is traded over a certain period; usually, over 24 hours is taken. It reflects the way you sell your assets without influencing their prices.

• Volume profile. This parameter characterizes the trading volume at certain price levels, rather than over time. In combination with the order book, it shows the “areas” of the buying and selling interest concentration.

• Chart patterns. This is one of the key technical analysis tools, involving drawing or analyzing trend lines on charts; this helps visualize upward and downward price trends.

Best Indicators for Technical Analysis

Now let's look closer at the indicators that traders use for identifying trends—these are the ones they rely on most while making decisions:

• Relative Strength Index (RSI). It measures momentum and compares recent gains and losses. Values above 70 indicate the asset is overbought and a correction is possible, while values below 70 note it is oversold and a rebound is likely.

• Moving Average Convergence Divergence (MACD). The indicator smoothes price data to identify trends over time. For example, 50-day and 200-day MACDs are often used for defining bullish or bearish trends.

• Exponential Moving Average (EMA). Similar to MACD types, but concentrates more on recent figures and uses shorter time intervals (9-day or 21-day EMA) to get faster signals.

• Support and resistance levels. This is a key visual tool—it helps traders see the value range where it could be “safe” to hold positions and plan entries and exits.

• Bollinger bands. These reflect volatility by placing bands above and below the moving average. So, when the price reaches the upper band, the market is overbought, and when it touches the lower one, the market is oversold.

• Fibonacci retracement. Supposes possible reversal levels during pullbacks in a trend. The most often tracked levels are 38.2%, 50%, and 61.8%, as they help when looking for areas to buy on a decline or sell on an uptrend.

• Stochastic oscillator. A momentum indicator that compares the closing price with the previous prices’ range. Values above 80 indicate overbought conditions, while ones below 20 are oversold.

Example of Technical Analysis for Bitcoin

Here we’ll show you how technical analysis works. We’ll look at the metrics that most accurately reflect likely changes in the asset price under current conditions. Let's take Bitcoin on September 29, 2025, as an example: at the time of writing, BTC was worth $111,590.

• Step 1: Price and volume trend

Over the past 24 hours, there has been a decline in BTC price with high trading volume at the same time, indicating strong bearish pressure. To confirm the hypothesis, we look at the market: recent upward movements haven’t been accompanied by volume on many major exchanges. The reason may be volatility rather than a trend.

• Step 2: Relative Strength Index (RSI)

The RSI for Bitcoin is 43.5, which is close to neutral and weak. This means the lack of a strong momentum signal, just because the asset is not oversold or overbought.

• Step 3: Moving Average Convergence Divergence (MACD)

Bitcoin's MACD is 480.40, which is positive. This shows the bullish momentum trying to push the price up. However, it may be weak or contested.

• Step 4: Exponential Moving Average (EMA)

The BTC price is below the 20-day EMA—this indicates short-term or medium-term weakness. If we also consider the simple MA, the price above the 200-day MA defines a long-term uptrend.

• Step 5: Support and resistance levels

The Bitcoin price support level is at $107,000, which is close to previous lows. The resistance level is in the $117,000-123,000 range, characterizing previous highs. In other words, if BTC falls below $107,000, it will be a dangerous zone for the asset, and if it rises above $117,000, the bullish trend will take over the situation with Bitcoin.

These stages say that the Bitcoin price may change: the asset may remain in the $107,000 and $117,000 range for some time. There is a chance for a long-term rise and a predominance of bullish sentiment, though it is quite weak. As we see today, October 1, the BTC price is around $116,200, which means the growth directions and the bullish trends we concluded are going to dominate.

To confirm or refute the hypothesis, it is necessary to conduct such an analysis every day and consider general sentiment.

Technical analysis is a comprehensive approach to forecasting asset prices and, as a result, making successful trades. Nevertheless, experience comes with practice, so it is worth making your first attempts at analysis as training. We hope this article has been a first step to understanding technical analysis in crypto, and if you still have questions, feel free to ask them in the comments.