In a brief, technical analysis is the study of an asset's market behavior in order to foresee its future. This kind of analysis is the true love of the traders. But is this kind of analysis any reliable? Yes and No. Remember that past performance does not guarantee future results, especially in the market of cryptocurrencies, it just increases your chances to get your profit. Therefore, prior to entering, do not forget your risk management.
Last but not least, in our case of pure holding, technical analysis should not be your main focus, yet understanding some trends and patterns may help you to buy these potential moon cryptos at the right time.
The reason that technical analysis often works is due to a variety of factors, including the following:
Investors' behavior: Investors make decisions based on a variety of psychological biases that replay themselves, according to behavioral finance research.
Crowd psychology: Since many investors & traders use the same technical research tools, key price levels are being strengthened.
As a result, when market patterns repeat themselves, investors who notice them early will gain an advantage in developing their strategy and earn higher-than-average returns. Even though the cryptocurrency industry is still in its infancy, trends are already emerging in the short and medium time term.
