In our previous article, we covered fundamental knowledge about cryptocurrency candlestick charts. This follow-up explores practical main chart indicators and methods to analyze token distribution control—critical skills for informed trading decisions.
Key Technical Indicators Explained
Technical indicators are mathematical calculations derived from price data, providing actionable insights for traders. Below are four widely-used indicators in crypto markets:
1. Moving Averages (MA)
- Definition: Arithmetic averages of prices over specific time periods.
Common Periods:
- Short-term: 5-day (red), 10-day (yellow)
- Mid-term: 30-day (blue)
- Long-term: 60-day (purple)
- Application: Identifies trend directions and support/resistance levels.
👉 Master advanced MA strategies here
2. MACD (Moving Average Convergence Divergence)
Components:
- Fast line (DIFF): EMA12 - EMA26
- Slow line (DEA): 9-day average of DIFF
- Histogram: 2 × (DIFF-DEA)
Trading Signals:
Signal Type Condition Action Golden Cross DIFF ↗ DEA Buy Death Cross DIFF ↘ DEA Sell Bullish Divergence Price lows ↘ + MACD lows ↗ Trend reversal likely
3. Bollinger Bands (BOLL)
Structure: Three lines forming a price channel
- Upper Band (resistance)
- Middle Band (20-period MA)
- Lower Band (support)
Tactical Insights:
- Prices near upper band → Overbought conditions
- Prices near lower band → Oversold conditions
- Band contraction → Impending volatility breakout
4. KDJ Stochastic Oscillator
Core Values:
- %K (fast line)
- %D (slow line)
- %J (sensitivity gauge)
Threshold Rules:
- %D > 80 → Overbought
- %D < 20 → Oversold
- Crossovers between %K/%D indicate entry/exit points
Analyzing Token Distribution Control
Token distribution patterns reveal market manipulation risks. Follow this Ethereum-based investigation method:
Step-by-Step Investigation
- Access Data: Visit Etherscan (VPN required)
- Search Token: Enter symbol (e.g., USDT)
Key Metrics:
- Total supply
- Holder addresses
- Top wallet concentrations
Red Flags:
- ERC-20 tokens claiming other standards
- Duplicate token symbols (verify via contract address)
👉 Real-time distribution tracking tools
FAQ Section
Q1: Which indicator works best for crypto?
A: MACD excels in trending markets, while KDJ performs better in range-bound conditions.
Q2: How often should I check token distribution?
A: Before major investments—concentrated holdings (>40%) increase pump/dump risks.
Q3: Can Bollinger Bands predict price crashes?
A: Yes. When bands widen after prolonged contraction, it signals heightened volatility, often preceding sharp moves.
Key Takeaways
- Combine multiple indicators for confirmation
- Monitor large wallet movements weekly
- Cross-verify findings with trading volume data
Master these techniques to navigate crypto markets with heightened awareness and strategic precision.