The CCI is an indicator that measures the variation in the price of an asset in relation to its average. It is very useful for identifying overbought and oversold points, as well as helping to find possible reversals in the cryptocurrency market.
Ok, but how does it work?
The CCI generates values ââthat oscillate around 0.
If the CCI is above 100, this indicates that the asset may be overbought, i.e. the price has risen too much and may retreat.
If the value is below -100, the asset may be oversold, suggesting that the price has fallen too much and there may be a recovery.
How to Apply?
To use the CCI, simply track the moments when it exceeds +100 or -100. When this happens, keep an eye on it, as opportunities to enter or exit the market may arise.
If the CCI crosses above +100, consider that the price may be at a top and it may be time to sell. If it crosses below -100, it may be a good point to evaluate a buy, hoping for an upward reversal.
Combine CCI with other indicators, such as RSI or MACD, to confirm signals and increase the accuracy of your decisions. Simple, straightforward and effective! đ
