The cryptocurrency sector is known for its ups and downs, but the charts show that Bitcoin can withstand fluctuations. This is what some traders refer to as Bitcoin’s “sideways trend.” To create entry and exit positions, you need to be aware of price ranges, whether you are a trader or a long-term investor. Let’s take a look at trading ranges and how they can help you enter the trading market.
What Are The Characteristics Of A Bull Market?
During bull markets, cryptocurrencies are flooded with new investors. This makes sense, as bull markets are one of the easiest trading conditions for cryptocurrencies. There’s a reason why these periods are referred to as “genius season” on crypto Twitter.
The bull market is now coming to an end, paving the way for a big crash. This is putting cryptocurrencies to sleep. Market trends are rarer than you might think. However, most traders ignore market patterns.
They say it’s difficult and unprofitable to trade. After entering the market during a strong uptrend, they find it difficult to trade in a tight trading range. Yet trading ranges offer tremendous opportunities and should not be ignored.
What Is The Importance Of A Trading Range In Trading?
A trading range is the price range within which the price of an asset moves continuously. The upper end of this range (resistance) is called the high price and is usually under the control of the sellers. At the other end of the trading range (resistance) or at the lower end of the trading range, the buyers have the upper hand.
After a period of price increase, these trading ranges usually become dominant and stabilize the market. For example, after a rapid rise in price, the price stays within the trading range until the moving averages catch up.
As mentioned earlier, trading ranges provide potential trading opportunities not only when the price is within the range, but also when a new trend begins. When a price breaks out of a trading range, it is often associated with a large price movement.
Are There Different Trading Ranges?
There are several types of large trading ranges, depending on their nature. For example, a breakout usually occurs at the end of an exhausted rally where large players sell their assets to unsophisticated buyers.
The bullish counterpart to a breakout zone is an accumulation zone, which usually follows a prolonged decline. Before the market turns upward, experienced traders accumulate a significant amount of assets in this zone and benefit from price stabilization.
The accumulation zone will repeat itself in the next up market. Similar to the accumulation zone, experienced traders buy a significant amount of assets before the market turns up. Within a larger uptrend, the accumulation zone is accompanied by a shorter consolidation phase.
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