Indicators commonly used in the cryptocurrency trading are introduced herein, assisting you to evaluate the preferences and sentiments of traders in this field.
Open interest
Observing indicators that are based on the volume of trading is a way to measure what is popular in the market. Among them is open interest which is in vogue, a general indicator for capital flowing into the market. It equals the total number of outstanding contracts held by investors at particular timing.
Capital flow of stablecoins
Traders may turn to stablecoins in a bid to minimize the volatility of prices when they expect that the digital currencies they hold can depreciate in the face of underselling. Therefore, it is also useful to pay attention to the volume of stablecoin trading and the overall trend of its movement.
Capital flow via exchanges
Investors may try dumping their digital assets via exchanges if they predict an impending bearish market in fear of the depreciation above-mentioned, which is a trend shown by net flows through exchanges that are equivalent to an indicator measuring the net amounts of tokens flowing into / out of an exchange.
Fear and greed index
As a hit in gauging investors sentiments, fear and greed index has always been useful in estimating the trough of the market.
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