Let me introduce some commonly used indicators for analyzing cryptocurrency trends and their usage methods and meanings:

Technical Indicators

Moving Average (MA)

• Calculation Method: Simple Moving Average (SMA) is calculated by adding price data over a certain period and dividing by the number of days in that period; Exponential Moving Average (EMA) gives more weight to recent price data, making the calculation more complex.

• Usage Method: You can judge the market trend by observing the position relationship between the price and the moving average. When the price is above the average and the average is sloping upwards, it indicates that the market is in an upward trend; conversely, it indicates a downward trend. You can also use the crossovers of moving averages of different periods to generate buy and sell signals, such as a short-term average crossing above a long-term average as a buy signal, and a short-term average crossing below a long-term average as a sell signal.

• Meaning: Used to smooth price data, filter market noise, and help investors identify the primary trend direction of the market; it is a lagging indicator.

Relative Strength Index (RSI)

• Calculation Method: Usually calculated based on the price rise and fall amplitude over a certain period, the formula is relatively complex, and its value ranges from 0 to 100.

• Usage Method: When the RSI value exceeds 70, it indicates that the market is in an overbought state, and prices may experience a pullback; when the RSI value is below 30, it indicates that the market is in an oversold state, and prices may experience a rebound. However, this is just a reference and cannot be used as a direct buy or sell signal; it must be combined with other indicators for comprehensive judgment.

• Meaning: Measures the speed and change of price fluctuations, used to assess the comparative buying and selling strength in the market and overbought/oversold conditions; it is a momentum oscillating indicator.

Moving Average Convergence Divergence (MACD)

• Calculation Method: The MACD line is derived by subtracting the slow line (26-day EMA) from the fast line (12-day EMA), and the signal line is the 9-day EMA of the MACD line, along with a histogram showing the difference between the MACD line and the signal line.

• Usage Method: When the MACD line is above the zero line, it is a bullish market, indicating strong bulls; when the MACD line is below the zero line, it is a bearish market, indicating strong bears. When the MACD line crosses above the signal line, it is a buy signal; when the MACD line crosses below the signal line, it is a sell signal. If the price diverges from the MACD indicator, it may also signal an impending trend reversal.

• Meaning: By showing the relationship between two moving averages, it determines the momentum of assets, used to identify the strength of trends and potential reversal points.

Bollinger Bands

• Calculation Method: Composed of a middle band (usually the 20-day SMA) and upper and lower bands (the middle band plus or minus a certain multiple of the standard deviation).

• Usage Method: When the price approaches the upper band, it may be in an overbought state, with a risk of pullback; when the price approaches the lower band, it may be in an oversold state, with a rebound opportunity. You can also observe the width changes of the Bollinger Bands; after the bands contract and then expand, it often indicates that the market will experience significant volatility and trend changes.

• Meaning: Used to measure market volatility and identify overbought or oversold price conditions, it is a technical analysis tool based on statistical principles.

Fibonacci Retracement

• Calculation Method: In a period of upward or downward trend, select two important price points, usually the high and low points, and then draw horizontal retracement lines based on the Fibonacci sequence ratios, such as 38.2%, 50%, and 61.8%.

• Usage Method: When a price pullback occurs after an increase or decrease, if support or resistance can be obtained near these Fibonacci retracement levels, then these levels may become important references for buy or sell points.

• Meaning: Used to identify potential support and resistance levels during price pullbacks, based on the magical ratio relationships of the Fibonacci sequence, suggesting that price pullbacks often pause or reverse near these specific ratio levels during trend movements.

On-Chain Indicators

MVRV Ratio

• Calculation Method: The ratio of market capitalization to realized value.

• Usage Method: When the MVRV ratio reaches a high level, such as around 4 as historical data shows, prices often approach a cycle top; when the ratio is low, it may indicate that the market is undervalued or at the bottom.

• Meaning: Used to measure the degree of market overbought conditions and the progression of cycles, helping investors determine market tops and bottoms.

Hodlwaves

• Calculation Method: The quantity of circulating Bitcoin divided by different age groups displayed through blockchain data.

• Usage Method: When the on-chain transfer volume of Bitcoin increases, especially if the proportion transferring from long-term holders to new funds rises, it may indicate that the market is about to peak; if the proportion of long-term holders remains stable or increases, it indicates that the market is relatively stable or has upward potential.

• Meaning: Reflects the inflow of new funds and changes in market participants' behavior, providing certain reference value for determining market tops and bottoms.

Market Indicators

Bitcoin Dominance

• Calculation Method: The ratio of Bitcoin's market capitalization to the total cryptocurrency market capitalization.

• Usage Method: When Bitcoin's dominance rises, it may indicate that market funds are more inclined to flow into Bitcoin, with the overall market being relatively conservative or in a bear market phase; when Bitcoin's dominance declines, it may indicate that altcoins are performing well, and the market is in a bull market or an altcoin season.

• Meaning: Used to gain insight into the overall market trend and capital flow, helping investors adjust trading strategies and portfolio structures.

Open Interest

• Calculation Method: The total number of valid contracts of a specific financial instrument existing at any given moment, such as the open interest of cryptocurrency futures contracts.

• Usage Method: An increase in open interest and rising prices indicate a strong trend and possible upward momentum; when open interest increases while prices are falling, it indicates that the downward trend may continue. If price diverges from open interest, such as prices rising while open interest decreases, it may signal an impending trend reversal.

• Meaning: Measures the speculative nature of the market and the expectations of participants, a key indicator for assessing market sentiment and predicting future price movements.

Trading Volume

• Calculation Method: The quantity or amount of cryptocurrency traded over a certain period.

• Usage Method: High trading volume often accompanies significant price fluctuations, indicating high market participation and strong trend credibility; low trading volume may indicate price consolidation or reversal, reflecting low market activity.

• Meaning: Used to measure market activity and volatility, an important auxiliary indicator for analyzing market trends, often used in conjunction with other indicators.