So far, using fundamental analysis, we learned how to choose the cryptocurrencies we want for buying and investing. Next, with technical analysis (also called “technical” or “chart analysis”), we’ll learn how to determine the best time to buy or sell an asset. In fact, in Step 8 through Step 11, we answer another core question for building a trading and investing strategy:
When should we buy a cryptocurrency?
Technical Analysis is a discipline for forecasting future price behavior using the historical data of a digital currency, commodity, gold, real estate, stock, or any other asset. Technical analysis relies on market data and charts to identify price patterns and trends, aiming to reach a reasonably reliable view of what may happen next. This is one of the most common analysis methods used in financial markets. And the important (and interesting) point is:
Once you learn technical analysis, you can apply it across many markets—crypto, Forex, gold, the stock market, and more.
And of course, I’ll teach these concepts and skills with a focus on the crypto market.
Which Is More Important: Technical or Fundamental?
Professional and experienced traders and investors use multiple methods of analysis to make better buy/sell decisions. To increase your probability of success in financial markets, you should learn both technical analysis and fundamental analysis. Don’t skip learning opportunities—because this field is broad, and there’s always something new to master.
Some investors, as soon as they finish their fundamental analysis and identify the coins they want, buy immediately—and decide to hold them for a long time (even for years). They call this holding: Hold—or in crypto slang, HODL.
These investors hope the price of what they bought rises over the next few years—or, as crypto people say, it “goes to the moon” (“To the moon / Mooning”). Even if their coins drop after a few weeks or months, they may feel happy and buy more to lower their average buy price.
In Step 12, I’ll share important tips about managing long-term investment portfolios. But in the short term, timing your buy or sell becomes extremely important. Traders use a skill called technical analysis for this purpose.
Technical analysis is the skill of using charts to study an asset’s historical trends and price patterns to anticipate potential future movement.
On most price charts, the vertical axis shows price and the horizontal axis shows time. On the price axis, values rise as you move upward. On the time axis, time moves forward from left to right. Other information—like volume—can also be displayed, but it requires deeper mastery.
A price chart is a visual history of an asset’s prices across a selected time period. The most common chart types used in technical analysis include:
- Line chart
- Bar chart
- Candlestick chart
In the next steps (Steps 8 to 11), with a focus on the candlestick chart, I’ll teach technical analysis to you and other interested learners.
A trend shows the overall direction of an asset’s price. A trend can be upward (bullish), sideways (range-bound), or downward (bearish). In many charts, an uptrend is shown in green or white, and a downtrend is shown in red or black.
Technical analysts believe trends repeat over time—meaning no trend stays bullish or bearish forever. Trends change across different time periods and often appear again. They also believe trends can be anticipated because human behavior is, to a degree, predictable. In Step 9, I’ll cover how to identify different types of trends.
Practical Concepts in Technical Analysis
Here are some of the most common concepts you may have already heard—or seen on social media:
- Price Action
- Indicators / Oscillators
- RSI (Relative Strength Index)
- MACD (Moving Average Convergence Divergence)
- MA (Moving Average)
- Fibonacci Retracement
- Ichimoku Cloud
- Bollinger Bands
Don’t be afraid of new technical terms. Once you start learning them, you’ll see how interesting—and practical—they can be. In the rest of the 21 Steps program, I’ve tried to introduce one of the most up-to-date and effective approaches in technical analysis—Price Action—in the simplest way possible with easy examples.
I’m confident that once you become interested in technical analysis, you’ll naturally follow the clues you find in CryptoMentor articles and other educational sources, test different tools and methods, and eventually choose the best tools for your personal strategy and skill level—then use them to improve your trading and investing results.
Worth Noting
Technical analysis is about probabilities—not certainties. The goal is not “predict the future perfectly,” but to improve decision-making: entries, exits, risk control, and consistency.
Timeframe matters more than most beginners realize. A setup that looks bullish on a 1-hour chart can be inside a bearish weekly trend. Always align your trading timeframe with your strategy.
Charts reflect human behavior and market structure. Trend, momentum, and patterns often repeat because crowds react similarly to fear, greed, and uncertainty—especially in highly liquid markets like BTC and ETH.
Don’t ignore liquidity and order flow. In smaller coins, the same “pattern” can fail more often because a few large orders can distort price. This is why combining fundamentals + tokenomics + supply/demand with technicals can be powerful.
Trending and Future Insights
AI-assisted charting will become normal. More traders are using AI to scan markets, backtest strategies, detect regime shifts, and summarize multi-timeframe structures. The edge won’t be “having AI”—it will be using it with discipline and risk rules.
Regulation will push traders toward more transparent venues. Over time, liquidity may concentrate more in regulated exchanges, regulated products, and compliant stablecoin rails. That can reduce certain manipulation risks—while also shifting volatility patterns into “event-driven” spikes around regulatory news.
Market microstructure is evolving. Spot ETFs, institutional custody flows, and professional market-making can change how support/resistance behaves. You’ll still use trendlines and key levels, but you’ll also pay more attention to liquidity zones, volume profiles, and volatility regimes.
Adoption creates new catalysts—and new “chart seasons.” As tokenized real-world assets (RWA), stablecoin settlement, and crypto payments expand, the market can develop new narratives that drive demand cycles. Technical analysis helps you time entries within those narrative cycles.
Threat: misinformation scales. As AI makes fake news and fake screenshots easier, sudden “headline volatility” can increase. Your protection is a rules-based plan and confirmation across multiple sources and timeframes.
FAQ
Q: What is technical analysis in crypto?
A: Technical analysis is studying price charts and market data to identify trends and patterns, aiming to time better buy/sell decisions—especially for trading Bitcoin and altcoins.
Q: Do I need both technical and fundamental analysis?
A: Yes. Fundamentals help you choose what to buy. Technical analysis helps you decide when to buy or sell—especially in the short and medium term.
Q: Which chart type is best for beginners?
A: The candlestick chart is the most widely used because it shows more information (open, high, low, close). That’s why Steps 8 to 11 focus on it.
Q: What does “trend” mean in technical analysis?
A: A trend is the overall direction of price: uptrend, downtrend, or sideways. In Step 9, you’ll learn practical methods to identify trends on charts.
Q: Why does technical analysis sometimes “fail”?
A: Because markets are probabilistic. News shocks, leverage liquidation cascades, low liquidity (especially in small coins), and macro events can invalidate patterns quickly. That’s why risk management matters.
Q: What’s the main goal of Step 8 for my strategy?
A: Step 8 gives you the foundation of technical analysis so you can improve timing. The next steps (9–11) build the practical tools you’ll use to spot trend, interpret candles, and recognize entry signals.