Key Points
- ADX is a trend strength tool… it tells you how strong a trend is, not whether price is bullish or bearish.
- ADX indicator crypto is useful for filtering chop… low ADX often means range conditions, rising ADX often means trend conditions.
- ADX values explained (20, 25, 40): below 20 often signals weak trend or range, above 25 often signals a stronger trend, above 40 can signal a very strong trend.
- ADX vs DMI difference: ADX measures strength, while +DI and -DI help you judge which side has control.
- ADX is most helpful when you combine it with price levels and trend context, not when you use it as a standalone signal.
- If any terms feel unfamiliar, use the Crypto Glossary for quick definitions, then return to this lesson.
This lesson is part of the Technical Analysis for Beginners series… for the full lesson map and supporting guides, visit the Technical Analysis for Beginners Hub.
Quick Answer
ADX (Average Directional Index) measures trend strength. In crypto, traders use the ADX indicator to tell whether the market is trending or choppy. ADX does not tell you direction… it only tells you intensity. A common read is: ADX below 20 suggests weak trend or range conditions, ADX rising through 20 to 25 suggests trend strength may be building, and ADX above 40 can signal a very strong trend. ADX is usually shown alongside DMI (+DI and -DI) to add direction context… +DI above -DI suggests bullish pressure and -DI above +DI suggests bearish pressure. The clean way to use ADX is as a filter: treat low ADX as a warning that many “signals” will fail, and treat rising ADX as evidence that trend-following tools may work better.
Where This Lesson Fits
Lesson 32 introduced the Ichimoku Cloud and showed how to read trend and balance using a full indicator system. Lesson 33 adds a simpler lens… ADX, which focuses on one thing only: trend strength.
What ADX Actually Measures
ADX is built from directional movement calculations, then smoothed into a single line.
You can think of it as a “trend strength gauge”.
ADX answers:
Is the market trending strongly… or drifting sideways?
It does not answer: “Should I buy or sell?”
It answers: “Is this environment likely to reward trend tools or punish them?”
ADX Values Explained (20, 25, 40)
These are not laws, but they are widely used reference points.
A practical beginner read is:
- Below 20: weak trend… range or chop is more likely
- 20 to 25: transition zone… trend may be starting, but not confirmed
- Above 25: trend strength is often meaningful
- Above 40: trend is often strong… moves can extend, but reversals can also be sharp
The more important signal than the number itself is the slope… ADX rising suggests trend strength increasing, ADX falling suggests trend strength fading.
ADX Vs DMI Difference (+DI And -DI)
ADX usually comes with two extra lines.
Mark:
- ADX = strength
- +DI and -DI = directional pressure
A simple read is:
- +DI above -DI… buyers have more directional pressure
- -DI above +DI… sellers have more directional pressure
- ADX rising… whichever side is winning is doing it with increasing strength
- ADX falling… trend pressure is weakening, range risk increases
Do not treat DI crossovers as automatic signals. They are context.
How To Use ADX To Avoid Choppy Markets In Crypto
Most beginners lose time by treating every indicator cross as meaningful.
ADX helps you filter.
Use ADX like this:
- First: check ADX level and slope
- Then: decide which tools make sense in this environment
- Finally: read price action at key levels
That reaction can come from:
- low ADX environments creating false breakouts and messy whipsaws
- rising ADX environments rewarding trend-following tools like moving averages or trendlines
If ADX is low and flat, many “set-ups” will look good and fail anyway.
A Repeatable ADX Workflow
Step 1: Check The Environment
Is ADX below 20 and flat… or rising?
Step 2: Add Direction Context
Are +DI and -DI aligned with the direction you are analysing?
Step 3: Anchor It To Levels
Where is price relative to higher timeframe support and resistance?
Step 4: Confirm With Volume When Relevant
Does volume expand on pushes and contract on pullbacks?
ADX gives you a regime read… levels and behaviour give you the decision zones.
Common Traps To Avoid
- treating ADX as a directional signal
- assuming a high ADX means “safe”… strong trends can still reverse violently
- ignoring the slope… flat ADX and rising ADX mean different things
- using ADX alone without levels, trend context, and confirmation
- flipping timeframes constantly until ADX tells the story you want
If you keep ADX as an environment filter, it stays useful.
Mini FAQs
What is ADX in crypto?
ADX is a trend strength indicator that helps you judge whether the market is trending or choppy, without telling you direction.
How do you use ADX indicator in crypto?
Use it as a filter… low ADX warns of chop, rising ADX suggests trend strength building, then confirm with levels and price behaviour.
What do ADX values 20, 25, and 40 mean?
Below 20 often suggests weak trend, above 25 often suggests a stronger trend, and above 40 can signal a very strong trend environment.
What is ADX vs DMI difference?
ADX measures strength. DMI uses +DI and -DI lines to show directional pressure, which helps you interpret the ADX reading.
Does ADX predict reversals?
No. ADX can fall as trend strength fades, but it does not predict when price will reverse… it only reflects trend intensity.
Is ADX good for beginners?
Yes, because it helps you stop forcing trend tools in range conditions and reduces confusion about why signals keep failing.
Next Lesson
In this lesson you learned what ADX measures, how ADX values are commonly interpreted, how ADX differs from DMI, and how to use ADX as a filter so you can avoid choppy conditions.
Next, Lesson 34 covers On-Balance Volume (OBV), showing you how volume can confirm or contradict price trends over time.
For the full lesson map and all supporting guides, visit the Technical Analysis for Beginners Hub.
If this lesson helped you stop treating every market as “trend-ready” and start filtering the environment properly, Alpha Insider is where these tools are applied with a consistent routine across BTC, ETH, and top altcoins.
Alpha Insider members get:
➡️ Kairos timing windows to plan entries before the crowd moves
➡️ A full DCA Targets page with levels mapped for this cycle
➡️ Exclusive member videos breaking down charts in clear, simple terms
➡️ A private Telegram community where conviction is shared daily
Strength first… then signals.
Legal And Risk Notice
This content is for education and information only and should not be considered financial, legal, or tax advice. Crypto assets are volatile and high risk. You are responsible for your own research and decisions, and you should consider seeking independent professional advice where appropriate.
Discussion