TECHNICAL ANALYSIS

Understanding Technical Analysis (TA)

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🕒 3:57 AM

📅 Jun 20, 2025

✍️ By moseseli600

Technical analysts don't try to find 
out the intrinsic value of an asset 
as fundamental analysts do. 

Instead, they look at the historical 
trading activity and try to identify 
opportunities based on that.
  
This can include analysis of price 
action and volume, chart patterns, the use of technical indicators, and many other charting tools.

The goal of this analysis is to evaluate a given market's strength or weakness. With that said, technical analysis isn't only a tool for predicting the probabilities of future price movements. It can also be a useful framework for risk management.

Since technical analysis provides a model for analyzing market structure, it makes managing trades more defined and measurable.  In this context, measuring risk is the first step to managing it. This is why some technical analysts may not be considered strictly traders. They may use technical analysis purely as a framework for risk management. 

The practice of technical analysis can be applied to any financial market, and it's widely used among cryptocurrency traders. But does technical analysis work?
  
Well, as we've mentioned earlier, the valuation of the cryptocurrency markets is largely driven by speculation. This makes them an ideal playing field for technical analysts, as they can thrive by only considering technical factors.