Average True Range Bitcoin Analysis & ATR Bitcoin Trade Signals

Developed by J. Welles Wilder

This indicator is a measure of volatility - it measures the range of bitcoin price movement for a particular bitcoin price period. The ATR is a directionless indicator & it does not determine the direction of the Bitcoin trend.

High ATR values

High Average True Range indicator values indicated market bottom after a selloff.

Low ATR values

Low Average True Range values showed extended periods of sideways bitcoin price movement- Price Range, such as those found at market tops and consolidation periods. Low ATR values are typical for the periods of sideways movement of long duration which happen at the top of the btcusd trading market and during consolidation.

Calculation

This technical indicator is calculated using the following:

• Difference between the current high & the current low

• Difference between the previous closing bitcoin price and the current high

• Difference between the previous closing bitcoin price & the current low

The final Average is calculated by adding these values and calculating the average.

Bitcoin Analysis & How to Generate Trading Signals

Average True Range technical indicator can be analyzed using the same principles as other volatility technical indicators.

Possible trend change trading signal - The higher the value of indicator, the higher the probability of a trend change;

Measure of trend momentum - The lower the indicator’s value, the weaker the trend movement.

Technical Analysis in Bitcoin Trading