Bitcoin Analysis Using Linear Regression Slope and Associated Trade Signals

The Linear Regression Slope indicator measures the gradient of regression lines based on data from the current Bitcoin price bar and the previous n-1 bars, where n represents the number of regression periods.

This tool figures out this number and changes it for each bitcoin price bar that is put on the bitcoin price chart.

The Indicator uses the Linear Regression Bitcoin Indicator. It uses linear regression to show where Bitcoin prices are going over a specific time. This direction is found by using the "least squares fit" way, so you can see market changes more clearly. Then, the line's slope is figured out to make the linear regression.

Linear Regression Slope

The slope values are then smoothed by multiplying the raw slope indicator values by 100 and then dividing this value by the bitcoin price

Linear Slope Regression is calculated as (raw value of slope * 100 / bitcoin price).

Smoothing the slope values is vital when analyzing volatile markets that trade within varying Bitcoin price ranges for each candlestick. A smoothed slope value will indicate the percentage change in Bitcoin's price for each candle used in calculating the regression line.

BTCUSD Analysis and Generating Signals

• If the smoothing out of the slope is 0.30, then the regression line is rising & adjusting at a rate of 0.30% for every candle.
• If the smoothing of the slope of -0.30, then the regression line is going downwards and adjusting at a rate of -0.30% for every candle.

The regression slope is presented as a two-color bar graph that goes up and down around the zero line. The zero line, which is used to make bitcoin signals, is at the zero mark.

• A rising slope (greater than the previous value of 1 candlestick ago) is displayed and illustrated in the Blue/Upward Slope colour,
• A declining slope (lower than the previous value of 1 candlestick ago) is displayed in the Red/Downward Slope colour.

Technical Analysis in BTC USD Trading

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