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I am new in the field and I would like to ask which is the correct way to define a point location for an image with EPSG 4326 crs.

I used QGIS software, and created a .csv file with the latitude - longitude information in decimal degrees (I was given the information of those coordinates both in Degrees - Minutes - Seconds, and decimal degrees. I checked these from Google Maps to see if they represent my locations of interest.) I added this .csv file I created as "delimited text layer" in QGIS to define the points in QGIS. And I used these points to extract remote sensing data from the image.

My question is; is defining the points in decimal degrees is correct for EPSG 4326 crs images?

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Yes, it is. EPSG 4326 is the identifier for the World Geodetic System 84 (WGS84). If you check the Well Known Text (WKT) for WGS84 you will see it uses degrees as units:

GEOGCS["WGS 84",
    DATUM["WGS_1984",
        SPHEROID["WGS 84",6378137,298.257223563,
            AUTHORITY["EPSG","7030"]],
        AUTHORITY["EPSG","6326"]],
    PRIMEM["Greenwich",0,
        AUTHORITY["EPSG","8901"]],
    UNIT["degree",0.01745329251994328,
        AUTHORITY["EPSG","9122"]],
    AUTHORITY["EPSG","4326"]]

Furthermore, if you check its bounds, you will see it goes from -180 to 180 (longitude) and from -90 to 90 (latitude).

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