Learn how to leverage the effective analytical tool to make informed trade decisions
WHAT IS BBS DISTRIBUTION CHART?
The BBS distribution chart can be used as a reference for forecasting the market, planning the trading strategies, or choosing the knock-out price. The BBS distribution chart shows the number of positions held in each knock-out price area of the entire market.
HOW TO READ THE CHART?
Comparing the length of the rectangular bars is equivalent to comparing the amount of BBS bought in each knock-out level. The longer the bar, the more the BBS bought in the area. There is a number beside the rectangular bar, which represents the number of BBS bought by traders.
In addition, the top of the distribution chart shows the proportion of BBS bought. If there are more Dive BBS than Moon BBS, it means that more traders in the market are bearish on the short-term outlook; on the contrary, if there are more Moon BBS than Dive BBS, it means that more traders in the market are optimistic about the short-term outlook.
LARGEST DISTRIBUTION
How the Largest Distribution forms
Say, you are bullish on BTC and believe the BTC price will not drop below 30K
- You decide to buy a BTC Moon token with a knock-out level (support level) near the 30K level.
Say, you are bearish on BTC and believe the BTC price will not rise above 40K
- You decide to buy a BTC Dive token with a knock-out level (testing resistance level) near the 40K level.
As many traders make investment, there will be a most chosen knock-out level.
Largest Distribution = The most chosen knock-out level interval range by traders
The implication of the Largest Distribution
It reflects the support level and testing resistance level that most traders believe in.
Traders can take it as a reference to make informed trade decisions.
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
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