Every trader has their preferred tools to perform <a href="https://www.delta.exchange/blog/guide-technical-analysis-crypto-trading">technical analysis</a>, but it’s important to still acquire knowledge regarding a broad range of <a href="https://www.delta.exchange/blog/best-technical-indicators-for-crypto-options-trading">technical indicators</a>. Aroon indicator is a tool that can help you spot any potential trend changes in the crypto markets. In this post, we find out about the Aroon indicator crypto in detail!
<h2>What is Aroon Indicator?</h2>
The Aroon indicator crypto shows trends or a certain price range for a crypto. The indicator came about back in 1995, the mind behind it being that of Tushar Chande’s. The indicator derives its name from the Sanskrit word ‘Aroon’, which means the early light of dawn. Aroon crypto indicator is named so because the tool also signals a forming trend early on.
Aroon indicator helps you with:
<ul>
<li style="font-weight: 400;" aria-level="1">Finding out about any trend changes early on</li>
<li style="font-weight: 400;" aria-level="1">Figuring out if a certain current price behavior is moving within a range or trending</li>
<li style="font-weight: 400;" aria-level="1">Forming a reliable trading strategy for better profits</li>
</ul>
<h2>What is the Aroon indicator crypto formula?</h2>
The Aroon crypto indicator is represented with two dynamic lines – one being the Aroon Up, and the other being the Aroon down. The first thing to know here is when Aroon Up overtakes Aroon Down, it signals a new uptrend, and the vice versa situation signals a downtrend. 
The calculation for the Aroon indicator crypto takes into account the high and low prices witnessed in a certain time period. The formulas for Aroon Up and Aroon Down go like this respectively:
Aroon Up = [(given time period − the number of periods since the highest high)/given time period] x 100 
Aroon Down = [(given time period − the number of periods since the lowest low)/given time period] x 100 
It’s to be noted that the usual period taken for this indicator is 14, but you can customize it according to your trading strategy.
Now, the Aroon Up determines how long buyers hold their positions since the last highest high within the given time period, while the Aroon Down measures how long sellers are holding their positions since the last lowest low within the same time period. 
Aroon Up touches 100 when the current candle is at its highest, or it returns to the percentage pointing to the last high. Aroon Down similarly reaches 100 when the current candle’s low is the lowest, or shows the percentage value showing the last low. 
<h2>How to read the Aroon indicator in crypto ?</h2>
<img loading="lazy" decoding="async" class="alignnone wp-image-29748 size-full" src="https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator.jpg" alt="How to read the Aroon crypto indicator" width="839" height="640" srcset="https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator.jpg 839w, https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator-300x229.jpg 300w, https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator-768x586.jpg 768w, https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator-24x18.jpg 24w, https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator-36x27.jpg 36w, https://static.delta.exchange/wp-content/uploads/2023/02/How-to-read-the-Aroon-crypto-indicator-48x37.jpg 48w" sizes="(max-width: 839px) 100vw, 839px" />
The image above shows the 15-minute BTC/USDT chart, where we can see the Aroon indicator crypto that moves between 0 and 100. The blue and red lines respectively symbolize the Aroon Up and Aroon Down. 
Every time the lines change their positions, it takes place with a crossover, which is what you need to be aware of the most with the Aroon crypto indicator, and we’ll find out all about it with an example below.
To read an Aroon crypto indicator chart, it’s important to remember that the level between 0 and 30 is considered to be showing a ranging market, while the levels between 70 and 100 are considered to show a trending market. The uptrend is strong as long as Aroon Up stays at the level 100, and conversely a strong downtrend is shown when the Aroon Down line is at 100.   
<h2>An example of the Aroon indicator</h2>
Let’s go through an example step-by-step to see how you can use the Aroon indicator crypto to analyze a crypto:
<ul>
<li aria-level="1">The Crossover</li>
</ul>
<img loading="lazy" decoding="async" class="alignnone wp-image-29749 size-full" src="https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator.jpg" alt="Crossover in aroon indicator" width="839" height="640" srcset="https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator.jpg 839w, https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator-300x229.jpg 300w, https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator-768x586.jpg 768w, https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator-24x18.jpg 24w, https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator-36x27.jpg 36w, https://static.delta.exchange/wp-content/uploads/2023/02/Crossover-in-aroon-indicator-48x37.jpg 48w" sizes="(max-width: 839px) 100vw, 839px" /> 
In the image above, we can see BTC’s value increasing right alongside a crossover shown in the Aroon crypto indicator. It’s to be noted that when the Aroon Up moves over the Aroon Down, it shows the buyers are overpowering the sellers and starting a bullish run.
<ul>
<li aria-level="1">Recognize the strong trend, if any</li>
</ul>
<img loading="lazy" decoding="async" class="alignnone wp-image-29750 size-full" src="https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator.jpg" alt="confirming strong trend in aroon indicator" width="839" height="640" srcset="https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator.jpg 839w, https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator-300x229.jpg 300w, https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator-768x586.jpg 768w, https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator-24x18.jpg 24w, https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator-36x27.jpg 36w, https://static.delta.exchange/wp-content/uploads/2023/02/confirming-strong-trend-in-aroon-indicator-48x37.jpg 48w" sizes="(max-width: 839px) 100vw, 839px" /> 
While in the first step, we saw a bullish trend start, we can not immediately consider it to be a strong trend. As long as Aroon Up doesn’t reach 100, the crossover isn’t validated. However, in the image above, we do see the Aroon Up reaching 100 after the crossover and the price moving higher. Now we can consider the bullish trend solid. 
<ul>
<li aria-level="1">Identify the reversal:</li>
</ul>
Now it’s time to find out how long a particular trend can sustain itself. A bullish trend will stay strong as long as Aroon Up moves between 70 and 100. However, Aroon Up crossing below Aroon Down would signify the trend losing steam. 
<h2>How reliable is the Aroon crypto indicator?</h2>
Any experienced trader is aware that there’s no technical indicator that can provide 100% accurate results. The Aroon indicator is pretty reliable for identifying trending and ranging markets, and it can help you figure out where to enter a market to profit from a trend or when to wait for the price to continue with its momentum. However, it’s still best to use Aroon with other technical indicators, like the moving averages for example, to form a robust trading strategy.  
<h2>The limitations of the Aroon crypto indicator</h2>
The Aroon crypto indicator falls short on quite a few aspects, namely:
<ul>
<li style="font-weight: 400;" aria-level="1">When the Aroon Up or the Aroon Down line touches 100, we tend to assume a strong trend; this might not always be correct. Sometimes, the price might not move higher or lower even though the lines in question touched 100.</li>
<li style="font-weight: 400;" aria-level="1">The Aroon indicator might mess up on the timing at times, showing signals only after a certain price movement has happened. </li>
</ul>
<h2>Conclusion</h2>
Despite the drawbacks, being aware of the limitations can help you make better use of the Aroon indicator crypto. The fact that this indicator can identify both trending and ranging markets makes it a very unique technical indicator indeed.  
<h2>FAQs</h2>
<ul>
<li aria-level="1">How to read the Aroon crypto indicator?</li>
</ul>
For the Aroon indicator, the levels between 0 and 30 are considered to be showing a ranging market, while the levels between 70 and 100 are considered to show a trending market. The uptrend is strong as long as Aroon Up stays at the level 100, and conversely a strong downtrend is shown when the Aroon Down line is at 100.   
<ul>
<li aria-level="1">What is the Aroon indicator crypto used for?</li>
</ul>
The Aroon indicator is used to identify trending and ranging markets, and it can help you figure out where to enter a market to profit from a trend or when to wait for the price to continue with its momentum.

Aroon indicator can help you spot any potential trend changes in the crypto markets. In this post, we find out about the Aroon indicator crypto in detail!

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