Linear Regression Slope Bitcoin Analysis & Linear Regression Slope Trading Signals

The Linear Regression Slope indicator calculates slope/gradient value of regression lines which involves the current bitcoin price bar and the previous n-1 bitcoin price bar (where n = regression periods)

This Indicator calculates this value and updates it for each bitcoin price candlestick loaded in the bitcoin price chart.

The Indicator is calculated from the Linear Regression Bitcoin Technical Indicator. The linear regression plots the bitcoin trend of the bitcoin price chart over a specified duration of time and this market bitcoin trend is determined by plotting a Linear Regression Bitcoin Trend Line using the "least squares fit" method. The slope of this bitcoin trend line is then calculated and this forms the linear regression.

Linear Regression Slope

The slope values are then smoothed by multiplying the raw slope indicator values by 100 and then dividing this value by the bitcoin price

Linear Slope Regression = (raw value of slope * 100 / bitcoin price).

The smoothing of the slope values is essential when comparing markets which are volatile and trade within wide bitcoin price ranges for each bitcoin price candlestick. Smoothed slope value will show the percent change in the bitcoin price per every candle used to calculate the regression (best fit) line.

Bitcoin Analysis & Generating Trading Signals

• If the smoothing of the slope is 0.30, then the regression line is rising & adjusting at a rate of 0.30% for every candle.
• If the smoothing of the slope of -0.30, then the regression line is going down and adjusting at a rate of -0.30% for every candle.

The regression slope is displayed as a bi-color histogram that oscillates above & below zero center-line. Center line that is used to generate bitcoin signals is set at the 0 level.

• A rising slope (greater than the previous value of 1 candle ago) is displayed in the Blue/Upwards Slope color,
• A declining slope (lower than the previous value of 1 candle ago) is displayed in the Red/Downwards Slope color.

Technical Analysis in Bitcoin Trading