Steemit Crypto Academy Contest / S15W6 – Chartist analysis

Hey Steemian friends!

👉 What is chartist analysis? And the importance of chart patterns.

Chartist analysis is a method where traders use price charts to uncover clues about where a cryptocurrency's price might be headed. The important factor about this method is to look for the historical behaviors of the market to predict future price.

In this case traders often look for the past trends and price movements and candlestick patters rather than focusing on fundamentals.

The illustration of price action of certain market we recognized as a price chart and often we see different patterns. These patterns can tell us a story about how the market behaved and Chartist analysis use this story as a signal and recognized potential future moves based on historical behaviors.

Though these behaviors might not act exactly as previous, we have a potential signal when assessing our decisions to enter or exit from the market. Hence chart patterns play a crucial role providing traders with essential insights into market. Here are some key reasons why chart patterns are important.

• Visual Representation of Market: The visual representation of a chart pattern can offer us a clear picture about the battle between market participants.

• Identification of Trends: Chart patterns help traders identify trends in the market and we identify the market as upward, downward and sideways according to the certain time frames. Understanding the current trend is very important to make sound trading decisions.

• Support and Resistance Levels: Typically, these levels are recognized as barriers where price action may reverse, break or hold. With chart patterns we can easily pinpoint these levels and understand the trend continuations and reversals.

• Risk Management: If we can identify key levels and patters correctly, we can strategically place stop-loss orders to mitigate potential losses. This is a proactive approach to secure profits from a trade.

• Confirmation of Other Technical Indicators: Chart patterns can use as a confirm signals with other technical indicators. When multiple indicators align with a specific pattern, it strengthens the signal, providing traders with increased confidence in their decisions.

👉 What is the shoulder head shoulder pattern? Show screenshots using the BTC/USDT pair. You can use another cryptocurrency pair if you wish.

It's a three-peaked formation that indicates a potential trend reversal. You get a peak (shoulder), then a higher peak (head), and another peak (shoulder). It's like the market doing the wave. Let me show you a screenshot with the BTC/USDT pair.

Left Shoulder	Head	Right Shoulder
52K	69K	52K

^{BTC/USDT | 01 D | Shoulder Head Shoulder pattern}

👉 Explain the formation of the inverse head shoulders pattern. Show screenshots of a cryptocurrency pair that displays this pattern.

Now, the Inverse Head and Shoulders are like the exact flip side of the Shoulder-Head-Shoulder. It's a potential signal that the market might be moving to an uptrend. Imagine an upside-down "H", no matter how you flip it you still get the same pattern. You have a low point (head), followed by higher low points (shoulders) in this pattern.

Left Shoulder	Head	Right Shoulder
39,430	38,555	39,480

^{BTC/USDT | 01 H | Inverse Shoulder Head Shoulder pattern}

👉 For the technical analysis of the Steem, would you use chart patterns? Explain your answer

Absolutely! I think referring chart patterns are like a must if you are a trader. For Steem or any other cryptocurrency, using chart patterns is a smart move. They give us insights into potential price movements and help us make informed decisions. Just like reading a map before a road trip, chart patterns guide us through the twists and turns of the market. So, yes, I'd definitely use chart patterns for the technical analysis of Steem.

^{STEEM/USDT | 4 H}

In the current price action, we cannot particularly see any chart patterns forming such as Head & shoulders, Elliott wave or bearish/bullish flags. But we can clearly analyze that the price was unable to break the 0.1991 mark and hence I marked the level as support. Then again we can see that the 0.2763 level seems to be the resistance where the price pulled back several times. Looking at the 04hours time frame we can clearly say the market seems to be going sideways.

However, the short term price action seems to give us a bullish signal with a lot of higher high candles. The bullish momentum would be boosted by a break in this resistance level at 0.2763. If anything goes south and breaks the support for a price correction we should be ready for that too.

All these insights were possible because of chart analysis. So once again I definitely recommend anyone to follow Chartist analysis before they enter the market to get knowledge about the long term and short term markets.

Thank you for this insightful contest @crypto-academy. Looking forward to taking on the new season’s challenge. I would like to invite @tenguhatanga, @crisvera & @morgan76 to participate in this contest.

Thank you.

Peace to all 🙏

^{The cover image has been developed by Midjourney. All other Screen shots are taken from Trading Vies and edited by photoshop}