Is Technical Analysis Viable In the Cryptocurrency Market?

Abstract

This thesis examines the viability of technical analysis in the cryptocurrency market using two commonly used oscillators. The testing period extends from the inception of Bitcoin, XRP, and Ethereum until December 31, 2022. Six Relative Strength Index rules and three Moving Average Convergence Divergence rules are tested on four-hourly and daily returns. The methodology is heavily based on the influential paper by Brock et al. (1992). Our findings indicate that the examined trading strategies can generate occasional profits but do not outperform the buy-and-hold strategy when considering transaction costs.