Close Menu
CryptoHoppers.comCryptoHoppers.com
    What's Hot

    Mt. Gox moves over 47,000 BTC to new wallet ahead of creditor repayment

    July 5, 2024

    SEC Commissioner Proposes Joint US-UK Digital Securities Sandbox

    May 31, 2024

    Art, Racing, and Blockchain: The Velocity Series and Remix Competition by ArtOnBlockchain and ArtOnInternet | NFT CULTURE | NFT News | Web3 Culture

    October 13, 2023
    Facebook X (Twitter) Instagram
    • Privacy Policy
    • Get In Touch
    Facebook X (Twitter) Instagram
    CryptoHoppers.comCryptoHoppers.com
    • News

      GENIUS Act Passes House with 308 Votes, Could Redefine Stablecoins and Supercharge U.S. Crypto

      July 18, 2025

      Bitcoin May Freeze Satoshi’s Wallet Over Quantum Threat

      July 16, 2025

      Bitcoin under pressure as Satoshi-era whale sells: Will BTC drop to $108K?

      July 15, 2025

      BlackRock’s Bitcoin ETF Blows Past $80,000,000,000, Faster Than Any Other Exchange-Traded Fund in History: Bloomberg Analyst

      July 14, 2025

      Will Pi crash or rally in 2025?

      July 11, 2025
    • Technology

      Windtree Becomes First NASDAQ Firm to Add BNB to Its Balance Sheet

      July 18, 2025

      What is AI16Z – AMBCrypto

      July 17, 2025

      Bonk gains 15% to lead memecoins as altcoins eye rally

      July 16, 2025

      Comment on Trump Firing Powell Would Set ‘Very Bad Precedent,’ Warns Pompliano by Powell's Replacement? Fed Chair Succession Process Underway

      July 15, 2025

      Hungary Bans Unlicensed Crypto Platforms: Revolut and Bitstamp Suspend Services

      July 14, 2025
    • Learn/Guide

      $10.7 trillion Charles Schwab to launch spot Bitcoin, Ether trading, eyes stablecoin market entry

      July 18, 2025

      Russia’s largest bank Sberbank to roll out Bitcoin, crypto custody services to catch up with global banks

      July 17, 2025

      Trump Media files trademarks for Truth Social AI and AI Search

      July 16, 2025

      DOJ and CFTC drop investigations into Polymarket

      July 15, 2025

      FUNToken Isn’t Just Trending – It’s Consolidating Power in Telegram, One User at a Time

      July 14, 2025
    • NFTs

      1mouth Analog: miirror’s Raw Leap from Digital to Handmade Chaos | NFT CULTURE | NFT News | Web3 Culture

      May 9, 2025

      NFTCulture Expands Into TCGs with Cardcore.xyz: Where Digital Collectibles Meet Competitive Play | NFT CULTURE | NFT News | Web3 Culture

      May 8, 2025

      From Moonshots to Broken Links: The Rise and Fall of CloneX | NFT CULTURE | NFT News | Web3 Culture

      April 24, 2025

      Pacific Spirit: Vinyl Meets Code in a Groundbreaking Generative Drop on Art Blocks | NFT CULTURE | NFT News | Web3 Culture

      April 16, 2025

      Daizen: Elevating the NFT Multiverse on Apechain Blockchain | NFT CULTURE | NFT News | Web3 Culture

      December 5, 2024
    • Regulation

      SEC Drops Binance Lawsuit: How Regulatory Clarity Could Spark a BNB Price Rally

      May 30, 2025

      Kentucky Governor Signs Off On ‘Bitcoin Rights’ Bill, Strengthening Crypto Protections

      March 31, 2025

      Utah Moves Closer To Bitcoin Reserve As Bill Advances To Senate Standing Committee

      February 23, 2025

      Bitcoin ETFs In Focus As Kansas Senator Proposes Up To 10% Pension Fund Allocation

      January 26, 2025

      MicroStrategy May Face Tax Issues Over $19 Billion Unrealized Bitcoin Gains: Report

      January 25, 2025
    • Business

      Sri Lanka’s E-commerce Platform Kapruka to Introduce Crypto Payments

      November 17, 2024

      Leading Eastern European Exchange Exmo Sells Business in Russia, Belarus

      November 16, 2024

      Bank of Russia to Launch Digital Ruble Payment Infrastructure by July 2025

      November 15, 2024

      Bitcoin Mining Company Mara Holdings Now Holds 26,747 Bitcoin: Q3 Earnings Report Reveals

      November 14, 2024

      Brazil Prepares to Let Tradfi Institutions Embrace Crypto

      November 13, 2024
    • Live Pricing
    CryptoHoppers.comCryptoHoppers.com
    Home » Learn Commodity Channel Index CCI Basics for Success
    Learn/Guide

    Learn Commodity Channel Index CCI Basics for Success

    October 31, 20235 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    bitcoin
    Share
    Facebook Twitter LinkedIn Pinterest Email


    There is a misconception among cryptocurrency traders that more complex indicators are more accurate in providing trading signals. However, in most situations, the reality is the opposite. Simple indicators often offer better signals than complex ones. The key is for a trader to possess the right skills to identify the appropriate indicator from the available simple options. This task can be challenging. If you are searching for a simple indicator to understand price movements, you can definitely consider the Commodity Channel Index. It is both simple and powerful. Let’s delve deeper into this remarkable indicator. 

    1. Commodity Channel Index: The Basics 

    Basically, CCI, or Commodity Channel Index, is a tool for crypto traders to discover if a trading asset is in a situation where it might be a good time to buy or sell. It also helps assess how strong a trend is. 

    1.1. The Origin of CCI: What You Should Know 

    The Commodity Channel Index indicator was developed by Donald Lambert in 1980. Lambert designed it mainly for the commodity market. It identified price trends and extreme conditions. Over the years, it has gained popularity. Now, it is widely used in trading, especially in cryptocurrency trading.  

    1.2. How Does CCI Works  

    When we launch CCI on a TradingView chart, it appears as a line, oscillating above and below zero, at the bottom of the chart. 

    Basically, it watches how fast prices change.

    The CCI indicator measures the current price compared to the average price over some time. When the price goes above its average, the CCI line goes up, and when the price drops below the average, the CCI line goes down.  

    1.3. Easy Way to Calculate CCI

    Calculating CCI is complex, but if it is broken down into three parts, it can be explained easily. 

    • Part 1: Find the Typical Price (TP)
    TP = (high + low + close) / 3

    You calculate TP by adding the high, low and closing prices of a crypto asset and then dividing the total by 3. 

    • Part 2: Compete the 20-period Simple Moving Average (SMA) of TP
    SMA = Sum of the last 20 TP values / 20

    The Simple Moving Averages is calculated by adding up the last 20 Typical Price values and then dividing the sum by 20.   

    CCI = (Typical Price – 20-period Simple Moving average (SMA) of TP) / (o.015 * mean deviation)

    To find CCI, you subtract the 20-period Simple Moving Average (SMA) of TP from the TP itself. After that, you divide this result by 0.015 times the mean deviation. 

    2. Launching CCI on a TradingView Chart: Simple Guide 

    Here are the steps to launch the CCI indicator on a TradingView chart.

    • Step 1: Sign in to TradingView 

    Log in to your TradingView account or create one if you don’t have an account.

    • Step 2: Select a Preferred Chart 

    Use the search bar to find the trading pair or asset you want to analyse on the chart. Click on it to open the chart. 

    • Step 3: Apply the CCI Indicator 

    Click on the ‘indicator’ icon located at the top of the chart. In the search bar within the Indicators panel, type ‘CCI’ and select ‘Commodity Channel Index.’

    • Step 4: Configure Chart Settings 

    Adjust the settings for the CCI indicator, such as the period (commonly 20), line colour, or any other preferences you have.

    You can also choose to display CCI in a separate pane below the chart or as an overlay on the price chart. 

    • Step 5: Start the Analysis 

    Once you have configured the CCI indicator to your liking, click ‘OK’ to add it to your chart. Now you will see the CCI line on your chart. It helps you assess price momentum and potential buying or selling opportunities based on CCI signals.

    3. How to Interpret CCI: All You Should Know 

    The Commodity Channel Index indicator offers valuable signals for traders, including overbought and oversold conditions, signals based on the zero line, and the ability to identify divergence in price movements. 

    • Strength and Weakness Conditions 

    When CCI is positive and relatively high, it suggests that the price is significantly above the average, indicating strength in the current trend. Conversely, when CCI is negative and relatively low, it indicates that the price is well below the average, showing weakness in the trend.

    • Strong Price Action or Unusual Strength/Weakness 

    The CCI typically fluctuates between -100 and +100. If it moves beyond this range, it signals strong price action or unusual strength/weakness in the market.

    • Zero Line Cross Signals 

    When CCI crosses above zero, it may indicate a bullish trend, and when it crosses below zero, it can signify a bearish trend. But this method can sometimes produce false signals, so it is common to use -100 and +100 to filter out these false signals.

    • Overbought/Oversold Levels 

    Typically, +200 and -200 are considered extreme levels. So, when CCI crosses above +200, it may signal an overbought situation, and when it falls below -200, it can indicate an oversold situation. However, the actual levels may vary depending on the asset’s volatility. Higher volatility assets might require a wider range, while lower volatility assets might use a narrower range.

    CCI can provide divergence signals also. That is, it can help identify a potential weakening of the current trend, possibly leading to price reversals.

    • Bullish Divergence: Occurs when the price makes a lower low, but CCI makes a higher low, suggesting a potential upward reversal.
    • Bearish Divergence: Occurs when the price makes a higher high, but CCI makes a lower high, indicating a potential downward reversal.  

    Understanding these signals correctly can help you make informed decisions in the highly volatile cryptocurrency market. 

    4. Endnote 

    In conclusion, the Commodity Channel Index is a valuable tool for traders in the cryptocurrency market. It helps determine when to buy or sell assets and assess the strength of trends. By understanding CCI signals like overbought/oversold condition, zeroline crosses, and divergence, you can make well-informed trading decisions. Use it wisely in this volatile crypto market.  





    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    $10.7 trillion Charles Schwab to launch spot Bitcoin, Ether trading, eyes stablecoin market entry

    July 18, 2025

    Russia’s largest bank Sberbank to roll out Bitcoin, crypto custody services to catch up with global banks

    July 17, 2025

    Trump Media files trademarks for Truth Social AI and AI Search

    July 16, 2025

    DOJ and CFTC drop investigations into Polymarket

    July 15, 2025
    Top Posts

    US Bitcoin ETFs see historic outflows as brutal sell-off shakes crypto markets

    December 20, 2024

    Bitcoin’s Correlation with Gold Price Hits Yearly High

    June 21, 2023

    Ripple forms a collaboration with Columbia’s Central Bank

    June 16, 2023

    Welcome to CryptoHoppers.com! Stay informed with the latest updates, trends, and insights from the dynamic world of cryptocurrencies. From Bitcoin to altcoins, blockchain technology to decentralized finance (DeFi), we cover it all. Discover expert analysis, market trends, regulatory developments, and exciting innovations shaping the crypto industry.

    Top Insights

    GENIUS Act Passes House with 308 Votes, Could Redefine Stablecoins and Supercharge U.S. Crypto

    July 18, 2025

    Bitcoin May Freeze Satoshi’s Wallet Over Quantum Threat

    July 16, 2025

    Bitcoin under pressure as Satoshi-era whale sells: Will BTC drop to $108K?

    July 15, 2025
    Advertisement
    Demo
    CryptoHoppers.com
    Facebook X (Twitter) Instagram
    • News
    • Technology
    • Learn/Guide
    • Regulation
    • NFTs
    • Business
    • Live Pricing
    © 2025. Designed by CryptoHoppers.com.

    Type above and press Enter to search. Press Esc to cancel.