Technical analysis looks at the past of a price to predict the future.
Two methods are generally used to analyze prices:
Technical analysis focuses on price patterns and trends. Fundamental analysis has more to do with the underlying factors. For example, an underlying factor in crypto is how healthy a blockchain is: how active are the users and what does this blockchain add? When investing in stocks, there is often more information that makes fundamental analysis possible. This is because companies publish quarterly results, company directors are often better known and laws and regulations can affect the share price.
Technical analysis only looks at the price. It is assumed that the market has already carried out a fundamental analysis and that decisions are made based on the analysis. In this way, patterns are recognized and conclusions are drawn. For example, an investor can see that a price is relatively low and that the volume doubles three days in a row. If an investor has seen this before, he can conclude that this pattern will continue for a week. This will be a reason for the investor to buy more. There are various tools used in technical analysis. It depends on the investor which instruments are used.
Both forms of analysis are predictions and offer no guarantee of success.
