Use of technical analysis in the cryptocurrency market

Abstract

This thesis focuses on utilizing technical analysis in the cryptocurrency market, specifically creating a personal trading strategy using principles and procedures of technical analysis. An important aspect of creating a strategy is defining the conditions for entering and exiting trades. The created strategy was backtested over a selected period on the Bitcoin market, evaluated for its success, and compared to the market's return for the same period. The evaluation revealed that the strategy was profitable over the selected period on the Bitcoin market. However, the market's return during that time was significantly higher than the return on the trading strategy. On the other hand, the market also experienced a significantly higher maximum drawdown, which is a crucial metric for trading. It can be concluded that, with the implementation of the recommendations included at the end of the thesis, this trading strategy can be used for trading in real market conditions on the Bitcoin market or other volatile markets.