The indicators offered by TradingView extend beyond their usefulness for forex, commodities, and stock trading and into the world of cryptocurreny.
In this article, I want to explore two TradingView indicators that Bitcoin traders may like to take a closer look at.
Cryptocurrency is an asset that can rely heavily on the sentiment of the market, perhaps more so than any other asset as its value is not so obviously tied to fundamental data like stocks and currencies. As such, paying attention to Bitcoin’s public and market sentiment can be vital in helping traders decipher the price action of this particular asset.
A few Bitcoin sentiment indicators exist on TradingView, with two freely available versions being the Bitcoin Futures Market Sentiment and the Bitcoin Binance Sentiment Index.
Bitcoin Futures Market Sentiment
You can use this indicator to simply illustrate optimistic and pessimistic market sentiment in the Bitcoin futures market. The red bars are indicative of pessimistic sentiment and green bars indicative of positive sentiment. The size of the bars also implies the degree to which the market is in either of these conditions.
Bitcoin Binance Sentiment Index.
The Bitcoin Binance Sentiment Index suggests market sentiment by measuring the divergence between futures and spot Bitcoin prices (as pulled from Binance). The sentiment must be decoded a little more than the Bitcoin Futures Market Sentiment Indicator but can still be done quickly and easily. When the value of the indicator is above 100, the average price of futures is above the spot price for a designated period suggesting a bullish outlook. Conversely, when the indicator’s value is below 100, the opposite is true.
The Bitcoin Bullish Percent Index analyses a wider segment of the cryptocurrency market in an attempt to understand Bitcoin. This indicator is designed off the assumption that a strong relationship can exist between some cryptocurrencies, and that individual cryptocurrencies typically like to move in unison
You can think of The Bitcoin Bullish Percent Index like a general RSI (Relative Strength Indicator). When the indicator is valued between 50.00 and 70.00, you might like to consider the cryptocurrency market as a whole (as well as Bitcoin) as overbought. When the Indicator is above the 70.00 level, you might like to consider it as extremely overbought.
Conversely, when the indicator is valued between 50.00 and 30.00, you might like to consider Bitcoin as oversold. When the Indicator is below the 30.00 level, you might like to consider it as extremely oversold.