Momentum Bitcoin Trading Analysis and Momentum Oscillator Bitcoin Trading Signals

The momentum indicator uses equations to calculate the line of plotting. Momentum measures the velocity with which btcusd price changes. This is calculated as the difference between the current btcusd price candlestick and the average btcusd price of a selected number of btcusd price bars ago.

Momentum represents the rate of change of the btcusd price over those specified time periods. The faster that bitcoin prices rises, the bigger the increase in momentum. The faster that bitcoin prices decline, the bigger the decrease in momentum.

As the btcusd price movement starts to slowdown the momentum will also slowdown and return to a median level.

Momentum

Bitcoin Trading Analysis and Generating Bitcoin Trading Signals

This btcusd indicator is used to generate technical buy and sell cryptocurrency trading signals. The three most common methods of generating trading signals used in bitcoin trading are:

Zero-Centerline Crossovers Signals:

• A buy cryptocurrency signal is generated when Momentum crosses above zero
• A sell cryptocurrency signal is generated when Momentum crosses below zero

Overbought/Oversold Levels:

Momentum is used as an overbought/oversold indicator, to identify potential overbought and oversold levels based on previous readings; the previous high or low of the momentum is used to determine the overbought and oversold levels.

• Readings above the overbought level mean bitcoin is overbought and a bitcoin price correction is pending
• While readings below the oversold level the btcusd price is oversold and a bitcoin price rally is pending.

Bitcoin Trend Line Breakouts:

Bitcoin Trend lines can be drawn on the Momentum indicator connecting the peaks and troughs. Momentum begins to turn before btcusd price thereby making it a leading indicator.

• Bullish reversal - Momentum readings breaking above a downward bitcoin trend line warns of a possible bullish reversal cryptocurrency signal while
• Bearish reversal - momentum readings breaking below an upward bitcoin trend line warns of a possible bearish reversal crypto signal.

Technical Analysis