Trade Bitcoin Trading

Stochastic Bitcoin Indicator Over-bought & Over-sold Levels

Stochastic oscillator is used to look for overbought/over-sold signals. Overbought levels are above 80% level and over-sold levels are below 20% level.

The key is to not only look at Stochastic oscillator when the %K or %D lines touch or cross overbought/over-sold, but also when they cross over & back through these levels.

Just as with other bitcoin trading momentum indicators such as RSI cryptocurrency indicator the Stochastic oscillator indicator can stay inside the overbought and oversold levels for some time. When this bitcoin trading stochastic oscillator indicator stays within these levels for a long time it indicates strong upward bitcoin trend (overbought) or strong downward bitcoin trend (oversold).

When the stochastic lines cross back below or above these overbought and oversold levels it's usually and generally a good indication of an upcoming bitcoin trend reversal.

A trader can look for further bitcoin signals to make the oversold or over-bought levels more reliable if:

Buy Bitcoin Signal Using Stochastic Oscillator Technical Oversold Levels

  • Prior to Buying, the %K & %D lines turn upward from below 5%.
  • A reading that is floating near 5% means that bitcoin trading bears are in control and there is selling of bitcoin crypto. A trader should wait out for the Stochastic Oscillator Technical to move back above 5% as a sign that the selling pressure is easing.

Buy signal is confirmed when the stochastic oscillator trading crosses above over-sold, then after a while returns to over-sold but this time moves up immediately without staying at the over-sold.

Buy Bitcoin Signal Using Stochastic Oscillator Technical Oversold Levels

Buy Signal Using Stochastic Oscillator Technical Oversold Levels

Sell Bitcoin Signal Using Stochastic Indicator Technical Overbought Levels

  • Prior to Selling, the %K & %D lines turn down from above 95 %.
  • A reading that is floating above 95% means that bitcoin trading bulls are in control and there is buying of bitcoin crypto. A trader should wait out for the Stochastic indicator to move below 95% as a sign that buying pressure is easing.
  • The sell cryptocurrency signal gets confirmed when the stochastic indicator goes below overbought, then after a while returns to over-bought but this time moves downward immediately without staying at the over-bought.

Sell Bitcoin Signal Using Stochastic Oscillator Overbought Levels

Sell Signal Using Stochastic Oscillator Technical Overbought Levels

Looking at different chart time-frames when using over-sold & over-bought levels can also help to figure out the correct entry strategy when opening a bitcoin trade.

The main theory is to trade with the btcusd trading market trend. Always double check the bitcoin trading signals with the longer term stochastic oscillator indicators to confirm bitcoin trading signals on the shorter crypto chart time frame periods.

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