What is momentum trading in cryptocurrency?

These traders own an enormous amount of cryptocurrency, giving them the power to drive the price up or down merely by entering or exiting the market. Time frames: Momentum traders analyze price movements within different periods, such as daily, hourly, and 15-minute charts.

What are the different types of momentum trading?

There are two main subcategories of momentum trading: absolute and relative. In absolute momentum trading, the trader considers just one asset, such as Bitcoin, and analyzes its past price movements to predict future trends. In relative momentum trading, the trader compares different coins or tokens.

How to detect a forming trend and a strong momentum?

Essentially, a trader can detect a forming trend and a strong momentum by analyzing the moving average. The MACD indicator (moving average convergence divergence) is one of the most frequently used tools for detecting not only price momentum but also potential trend reversals.