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Technical analysis is a tool or method used to predict a cryptocurrency pair’s probable future price movement. Finding definitive proof for the reversal of a trend is not easy. The market remains in trend despite “market noise”. Trends exist until it is shown that they have ended During a downtrend, the volume should decrease with a price decrease. Trends get confirmed by volumeĭuring an uptrend, the volume of shares stranded should increase with a price increase. If one company’s performance improves while the other decreases, then it might be a sign that a market trend may be reversing soon. If two companies or sectors are causally linked, an increase in one company should increase the other company. Stock market averages must confirm each other The market price integrates factors such as interest rate movements, earnings expectations, revenue projections, major elections, product initiatives, etc. Asset price is an accurate reflection of the hopes, fears, and expectations of the market participants. The price of the asset changes to take any new news into account.

The market incorporates new information as soon as it becomes available Knowledgeable investors begin to redistribute their holdings in the market. The distribution phase – The distribution phase happens after the speculation of the absorption phase.The public participation phase – The public participation phase, also known as the absorption phase, is when the rest of the market starts following knowledgeable investors.The accumulation phase – The accumulation phase is when knowledgeable investors start buying or selling the coin against the general perception of the market.The major market trends have three phases The short swing is the short-term speculation in the market. The minor movement of a market is called the short swing. Trends in the medium swing are measured in terms of primary price change. This is what happens in a medium time frame – anywhere from ten days to three months. The secondary or intermediate movement of a market is called the medium swing. The main movement can be bullish or bearish. It is the major trend in the market and can last anywhere between a year and several years. The main movement of a market is called the primary movement. Read on to learn more about each of the tenets.