Stochastic Oscillator Technical Bitcoin Analysis & Stochastic Oscillator Signals

Developed & Created by George C. Lane

Stochastic Oscillator is a momentum indicator - it shows the relation between the current closing bitcoin price relative to the high and low range over a given number of n periods. Oscillator uses a scale of 0-100 to draw the values.

Stochastic BTCUSD Indicator Analysis - Stochastic Oscillator Technical Best BTCUSD Indicator Combination

This oscillator relies on the idea that in an uptrend for bitcoin, prices close near the day's high. In a downtrend, they close near the low.

The Stochastic Lines are drawn as 2 lines- %K and %D.

Fast line %K is the main
Slow line %D is the signal

3 Types of Stochastics BTCUSD Oscillators: Fast, Slow & Full Stochastics

There are three types: fast, slow, and full Stochastic. These three technical indicators examine a specified chart period, for instance, the 14-day period, and assess how today's closing price of bitcoin compares to the high/low range of the time period utilized in calculating the stochastic oscillator.

This oscillator works on the principle that:

In an up-ward bitcoin trend, bitcoin price often tends to close at the high of the candlestick.
In a downwards btcusd cryptocurrency trend, bitcoin price tends to close at the low of the candlestick.

This btcusd indicator shows the force of the Bitcoin trends, & identifies the times when a market is overbought or oversold.

Bitcoin Analysis & Generating Signals

Most common techniques used for trading analysis of Stochastic Oscillators to generate cryptocurrency signals are cross overs signals, divergence signals & overbought over-sold areas. The following are the techniques and methods used for generating trading signals

Bitcoin Trading Cross over Trade Signals

Buy signal - % K line crosses above %D line (both lines moving upwards)

Sell signal - %K line crosses below the %D line (both lines going downwards)

50-level Crossover:

Buy signal happens when the stochastic lines cross over the 50 level. This generates a buy for bitcoin.

Sell signal - when stochastic indicator lines cross below the 50 center mark a sell bitcoin signal gets generated.

Divergence BTCUSD Crypto Currency Trading

The Stochastic indicator is also used to identify divergences between this technical indicator and the bitcoin price.

This is used to figure out potential bitcoin trend reversal bitcoin signals.

Upwards/rising bitcoin trend reversal - identified by classic bearish divergence

identified by a classic bearish divergence - Stochastic Oscillator Technical BTCUSD Indicator Analysis

Bitcoin Trend reversal - identified by a classic bearish divergence

Downward/descending bitcoin trend reversal - identified by classic bullish divergence

identified by a classic bullish divergence - Stochastic Oscillator BTCUSD Indicator Analysis

Bitcoin Trend reversal - identified by a classic bullish divergence setup

Overbought/Over-sold Levels in Trading Indicator

Stochastic helps find possible overbought and oversold spots in bitcoin price shifts.

Overbought values greater than 70 level - A sell cryptocurrency signal forms when the oscillator rises above 70% and then falls below this technical level.

Overbought levels Stochastic Oscillator Technical values greater 70

Overbought - Values Greater 70

Oversold values less than 30 level - a buy cryptocurrency signal is derived/generated when the oscillator moving below 30% & then rises above this technical level.

Oversold levels Stochastic Oscillator values less than 30 - Stochastic Oscillator Technical BTCUSD Indicator Analysis

Oversold - Values Less Than 30

When the Stochastics Indicator Technical goes past certain levels, trades are made. But, high and low levels can trick you, especially when the btcusd market is going up or down.

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