Ethereum: Result is different than Binance technical analysis result

Ethereum Technical Analysis: A Story of Two Outcomes

As a creator of technical analysis scripts using libraries such as Go, I have worked with a variety of cryptocurrencies, including Ethereum. Recently, I analyzed Ethereum price movement using the RSI (Relative Strength Index), Stoch RSI (Stochastic Oscillator RSI), Boler Band, and Moving Average Convergence Divergence (MACD). While my script has been generating accurate results for some time, I have noticed a significant discrepancy between its predictions and the actual data from Binance.

In this article, I will outline the differences between my analysis and the actual performance of Ethereum on the Binance exchange. It is important to understand that technical analysis is not an exact science and there are many factors that affect market behavior. However, by examining the results of my script against historical data, we can identify potential issues.

RSI: Bullish Indicator

My script uses the RSI, which measures the size of price changes over time. I set the threshold at 70, indicating overbought or oversold conditions. As expected, my results show that prices often find themselves in an “overbought” state, which results in false signals.

Stoch RSI: Oscillator

The Stoch RSI is a momentum oscillator that calculates the difference between the current price and its 14-period moving average. My script shows that the Stoch RSI typically peaks around 70-80%, which I have labeled “overbought.” While this indicates potential buying pressure, it is important to consider other market factors.

Boler Band: Trading Range

My Boler Band is a technical indicator that plots the upper and lower bands of a trading range. This script shows that prices often stay within these ranges, which I have labeled as “support” or “resistance.” While this suggests that prices are generally stable, it is crucial to monitor other indicators for potential deviations.

MACD: Moving Average Convergence and Divergence

My script uses the MACD line as a moving average with a 26-period EMA. I set the signal line at -12 and the crossovers above that level. As expected, my results show that prices often move in tandem with the MACD line.

However, the
signal line is usually above zero, indicating strong buying pressure. This is where it gets interesting.

Divergence

Contrary to Binance real-time data, which shows a different picture:

• Prices are not consistently overbought or oversold.

• Stoch RSI does not peak at 70-80% as often as my script predicts.

• The Bolera band is often shorter than expected, indicating higher volatility.

• The MACD line is not consistently above zero; in fact, it is often below zero.

Conclusion

While technical analysis can be a powerful tool for investors, its accuracy has its limitations. In this case, my script seems to be making incorrect predictions due to the inherent nature of Binance’s data. There are several factors that contribute to this discrepancy:

• Lack of historical context: My script does not take into account broader market trends or seasonal patterns.

• Limited trading volumes

  

  : Actual trading volume on Binance may differ from my simulated data.

• Noise and sampling rates: Different time frames (e.g. 1-minute data vs. 5-minute data) can result in noisy or inconsistent signals.

As a developer, it is imperative that you verify your technical analysis using real-world data to ensure accuracy. If you rely solely on simulations such as this, be aware of the potential limitations and take them into account when making trading decisions.

Additional Recommendations

• Use More Accurate Indicators: Learn other technical indicators that are well-known in the cryptocurrency market.

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