Crypto Trading Review and Assessment 3 — Questions and Answers
Question 1: On a candlestick chart, a green (bullish) candle means the close was:
- Higher than the open (Correct answer)
- Lower than the open
- Equal to the open
- Below the previous low
Correct answer: Higher than the open
A bullish candle closes above its opening price.
Question 2: What does RSI (Relative Strength Index) primarily measure?
- Momentum and overbought/oversold conditions (Correct answer)
- Total trading volume
- Market capitalization
- Network hash rate
Correct answer: Momentum and overbought/oversold conditions
RSI gauges momentum, flagging overbought (>70) or oversold (<30) levels.
Question 3: A 'golden cross' occurs when:
- A short-term MA crosses above a long-term MA (Correct answer)
- Price hits an all-time high
- Volume doubles overnight
- Two exchanges list the same coin
Correct answer: A short-term MA crosses above a long-term MA
A golden cross (e.g. 50-day above 200-day MA) is a bullish trend signal.
Question 4: In trading, 'support' refers to a price level where:
- Buying interest tends to halt declines (Correct answer)
- Selling pressure caps gains
- Trading is suspended
- Fees are highest
Correct answer: Buying interest tends to halt declines
Support is a level where demand historically prevents further price drops.
Question 5: What does trading volume help confirm?
- The strength behind a price move (Correct answer)
- The total coin supply
- The block reward size
- The exchange's age
Correct answer: The strength behind a price move
High volume lends conviction to a price move; low volume makes it suspect.
Question 6: A 'doji' candlestick typically signals:
- Market indecision (Correct answer)
- Strong bullish continuation
- A confirmed reversal every time
- Zero trading activity
Correct answer: Market indecision
A doji has nearly equal open and close, reflecting indecision between buyers and sellers.
Question 7: Bollinger Bands widen when:
- Volatility increases (Correct answer)
- Volume drops to zero
- The asset is delisted
- Fees are reduced
Correct answer: Volatility increases
The bands expand during high volatility and contract when it's low.
Crypto Trading Review and Assessment 3
On a candlestick chart, a green (bullish) candle means the close was: