Bitcoin Technical Analysis

The cryptocurrency movement is charging ahead at light speed. Each day, more and more people are getting involved with trading bitcoin and other digital assets. What’s challenging is that these people come from all walks of life. Some are experienced traders with a new interest in bitcoin. Others have heard of the potential for crypto to change our world and want to be a part of it. Still more are fed up with the way governments are handling economics and want to learn everything about bitcoin. All of them are looking for resources to learn bitcoin trading strategies. For these people, we’ve compiled a list of the 5 best books to read for learning bitcoin technical analysis. 

In this article, we’ll first review what technical analysis is as well as describe how bitcoin works and how it’s revolutionary. After that, we’ll delve into the best books on bitcoin technical analysis available today.

Please note that while we’re providing resources that will help with bitcoin TA, these strategies may be applied to other cryptocurrencies as well. Since bitcoin at this writing has a 70% market dominance, we chose this coin to use in formulating our book list.

We’ll also make sure to give you an idea of the reading level for each book. For instance, is the book more appropriate for stock traders moving over to crypto or is it more for a complete newbie? Both, of course, are welcome in the world of blockchain technology, where everyone is able to participate in the new economic paradigm.

What is technical analysis?

Technical analysis (TA) is a trading discipline that involves the evaluation of price movements and volume data. Traders use TA in order to find opportunities by identifying trading trends and patterns. Essentially, technical analysis uses past trading activity to predict and plan for future price action. Then they make trades based on their analysis.

As an example, traders often spot ‘head and shoulders’ patterns when studying bitcoin price and volume history. This helps them try to determine the future action of bitcoin’s price so they can make trades accordingly.

Head and shoulders chart pattern as used in bitcoin technical analysis

Head & Shoulder Pattern – Image by Altafqadir 

What is bitcoin?

In the simplest of terms, bitcoin is a new kind of money. In fact, it’s more like information than money. By using the open Bitcoin Network, anyone can access a payment system whereby you send money directly to another person, anywhere on the planet, with just any device. There are no 3rd parties involved and it costs very little to move money around this way. 

With traditional fiat money, like the US dollar or the Yen, there is a central authority that makes and enforces all the rules for that currency. On the other hand, bitcoin runs on a decentralized blockchain ledger, meaning it has the following characteristics:

Characteristics of a decentralized cryptocurrency

  • It’s open to the public.
  • No one can manipulate the ledger.
  • The ledger entries are permanent, neutral and uncensorable.
  • There is no central authority; bitcoin is an algorithm and software that runs itself with the help of users across the planet who contribute to the success of the system and receive rewards for their work.
  • The blockchain is cryptographically secured and also employs a one-of-a-kind system of security through its worldwide network of incentivized participants who get rewards for playing by the rules (and shut out of the system if they don’t).
  • Only 21 million bitcoins will ever be minted. Additionally, they are on a tight schedule of issuance which everyone can see and understand. Thus this currency is not subject to quantitative easing, or the inflationary tactics that governments and central banks are famous for abusing.

Hopefully, we’ve made it clear how different bitcoin is from our highly manipulated and controlled system of currencies in today’s world. During the past ten years, since Satoshi Nakamoto released the bitcoin protocol to the public, the number of bitcoin users and wallets has continued to grow rapidly. Not only that, traders have enjoyed the volatility of bitcoin in its nascent stages. 

Today they continue to make bitcoin trades on numerous exchanges and applications. Institutional investors and investment fund managers have also turned their eye toward bitcoin. In fact, according to influencer Anthony Pompliano, bitcoin itself is now the top performing asset of this decade. 

bitcoin technical analysis

@APompliano’s Twitter Feed

Best books for bitcoin technical analysis

Blockchain technology and decentralized mechanisms have opened up the world to financial tools and data like never before. It’s not just Wall Street traders who are interested in bitcoin technical analysis. Crypto enthusiasts are quickly learning that the more they empower themselves with knowledge in this new world of decentralized finance, the better off they are.

To help traders of all levels of experience arm themselves with knowledge, we’ve compiled a list of the best books for bitcoin technical analysis. So here they are, bottom to top, along with a description of each and a link to purchase the book:

#5 – Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond 

by Chris Burniske and Jack Tatar  

Reading Level:  Perfect for first time crypto traders

bitcoin technical analysis

Burniske and Tatar provide a comprehensive guide to cryptocurrency trading. Their book includes an introduction to not just technical analysis for bitcoin, but also the unique psychology of crypto markets. 

Newcomers from traditional trading and complete crypto newbies alike will benefit from discussions on:

  • How to evaluate crypto assets.
  • Historical context to apply when using technical analysis.
  • Guides to help everyone get up to speed so they can begin using and trading cryptocurrencies. For example, they guide you through the process of researching which exchanges and markets you want to use for your analysis.

While this is not a straight technical analysis book, it is perfect for giving traders and newcomers the background information they need to get started.

#4 – Technical Analysis of the Financial Markets

by John Murphy

Reading level: Appropriate for those who already have had an introduction to trading and/or crypto markets.

bitcoin technical analysis

At first glance, this book may look like an intense read. But while it covers everything under the sun when it comes to TA, it does so in an approachable manner. The author has more than 40 years of trading experience so he speaks easily from his own wealth of knowledge. And while this book is not about bitcoin, in particular, the vast information about technical analysis can be applied to bitcoin and other cryptocurrencies. 

With over 500 pages of content, there are not many stones left unturned. You will learn:

  • The general theories behind technical analysis
  • Chart construction
  • Trend concepts
  • Patterns
  • Japanese candlesticks
  • Much, much more.

At the end, in the resources section, Mr. Murphy outlines all the essentials of building a trading system. While his perspective is from traditional trading, the tenets of his book easily cross over serving as the perfect guide to embarking on bitcoin technical analysis.

#3 – Technical Analysis: Cryptocurrency Trading Basics – How To Start Making Money In Cryptocurrency For Newbies

By Theodore Mastery

Reading Level: This book is specifically for beginner crypto traders who are feeling information overload. It’s design is to take you from start (zero knowledge) to finish (successful trader).

bitcoin technical analysis

Mastery starts out his book with a discussion on Dow Theory, which he explains is the basis for technical analysis. He goes onto to cover many TA topics in depth, including:

  • Detailed information regarding bitcoin technical analysis
  • TA and its association with bull and bear markets
  • Support and Resistance
  • Indicators and tools for crypto traders
  • A thorough guide to Japanese candlesticks

#2 – Encyclopedia of Chart Patterns

 by Thomas Bulkowski

Reading level:  Advanced. Appropriate for traditional traders as well as experienced crypto traders.

bitcoin technical analysis

Bulkowski’s 1000+ page behemoth is a reference guide for the professional trader, crypto or otherwise. Whether you learned to trade on Wall Street or are a self-taught crypto trader, you’ll find this an invaluable resource for upping your game.

The author takes every conceivable chart pattern and gives a complete overview, including:

  • A results snapshot
  • Upward and Downward Breakouts, complete with Bull and Bear market performance statistics.
  • Complete information on how to recognize and utilize 53 different chart patterns, including broadening formations, diamond bottoms and tops, gaps, and head and shoulders. 
  • Event patterns such as earnings surprise (good and bad), stock downgrades, dead-cat bounce, and many more.

#1 – CRYPTOTRADING PRO: Trade for a Living with Time-tested Strategies, Tools and Risk Management Techniques, Contemporary Guide from the Beginner to the Pro

By Alan T.Norman

Reading Level: This book is designed to take a beginner and bring them all the way through to successful crypto trading and effective bitcoin technical analysis. 

bitcoin technical analysis

Norman’s book gives traders what they need to advance in becoming a successful crypto trader. He goes into great detail about how cryptocurrency trading is different from traditional trading. He also covers how this has basically changed the entire game. You will have homework assigned by the author of this book to help you on your journey.

In the book, you will find detailed chapters on topics such as:

  • How to choose the right platform for technical analysis
  • Developing your own trading algorithms
  • Chart patterns
  • When to buy and when to sell to make a profit

We hope you found this list to be helpful in your search for learning resources on cryptocurrency trading. If you have a favorite bitcoin technical analysis book that you’d like to share, feel free to Tweet it out to us here. For additional crypto trading resources, be sure to browse the HedgeTrade blog, which has over 200 articles, guides, and tutorials, all of them in the crypto trading sphere. 

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