How To Read Cryptocurrency Charts – The stock market has been around for a long time and every trader is probably familiar with various price charts. Well, today there is a new class of digital asset that has taken the internet world by storm… cryptocurrencies.
As a logical extension, this new invention opened up an alternative market for traders: crypto trading. Such markets take advantage of the rise and fall in the prices of various cryptocurrencies and tokens, rather than trading stocks or jumping on the currency. Cryptocurrency trading is usually done on cryptocurrency exchanges. Since the design of cryptocurrencies, they have become a popular alternative to the stock market among the blockchain community. And just like any other market, cryptocurrency exchanges often use trading charts to help traders easily visualize and determine the next move of the market. In this article we will cover how to read the most popular crypto tables. Let’s get to it!
How To Read Cryptocurrency Charts
If youarecompletelynewtotradingingeneral,youmaybeasking”WhatareCryptoGraphics?” There are many types of price charts available, but they are all basically graphical displays of current prices, trading volume, and overall market momentum. . Cryptocurrency traders use these charts to determine when to buy, when to sell, and when to HODL. That’s why it’s important to learn how to read crypto tables.
Top Chart Patterns For Crypto Trading
TradeView.com Bitcoin Line Chart – Screenshot by Author Above you see an example of a simple Bitcoin line chart (we will discuss this later below). Here is an overview of some of its core elements:
Using a simple chart like this, you can tell if the market is in an uptrend or a downtrend. An uptrend means that the price tends to increase in value (up), while a downtrend is usually responsible for a decrease in value (down). Such trends can be long-term or short-term. These are the basics when it comes to market movements. If you want to put all this into practice in your stores, you can read our article on “buying a dip”. Do you see? Reading cryptocurrency charts is not that difficult. Real talent comes from making assumptions about when to enter and exit a particular market based on identifying expected market trends. And the first step to doing that is to recognize what you see.
Crypto cards come in different shapes and sizes. Knowing how to read them, including reading Bitcoin charts (and more), is a lot easier than you think.
In this article we will cover some of the most important charts to cover the basics. Are you ready? Let’s dive into it.
What Charts Should Crypto Investors Use?
The first stop on our journey to reading crypto price charts is the standard combination of a line chart and a volume chart. Line charts show a simple line showing the asset’s historical price points, while volume charts show its historical trading volumes. In cryptos, these usually consist of daily closing prices over a period of time. Chart display schedules can often be measured in minutes, 1 hour, 4 hours, day, week, month, 3 months, 6 months, 1 year, or all times (among others).
You can see these charts (among other data) on CoinMarketCap. There you can read the cryptocurrency price charts of every crypto in the market, all 2,278 of them (July 23, 2019)! Reading simple price index charts is good for an overview, but if you want to trade, you probably want more information.
The best way to predict when a chart is showing an uptrend is to understand what variables allow the price of the coin to rise. In this case, you should pay attention to two things:
Next we will discuss how to read crypto candlestick charts. These provide much more information than simple price charts and are the most popular charts among traders. What other information do these graphs show? Glad you asked…
Crypto Trading 101: Simple Charting Patterns Explained
The daily candlestick price chart consists of (you guessed it) “candlesticks” (discussed in more detail below). It shows the opening and closing prices of the market, as well as the high and low prices of the day (or other time periods). It also quickly shows whether the price ended positive or negative during that period.
Together, the candlesticks form a moving average that you would normally see on a line chart, but with additional information (discussed in more detail below). Sometimes you may see a doji that looks like a cross or a plus sign (✝) instead of a candlestick. A doji means that the opening and closing prices for that day were the same. Investopedia.com Candlestick Chart – screenshot by author
Above is a candlestick chart consisting of candlesticks (1). On the right vertical axis you can see the price (2). Hovering over a specific point in the moving average should highlight the current price (3). The lower horizontal axis shows the date (4).
Candlestick charts can be placed on daily charts, hourly charts, 15-minute and even 5-minute charts (longer and shorter), among others. These timeframes show the time taken per candlestick.
How To Read Cryptocurrency Price Charts, And Why They Matter
A “candlestick” looks like a thick colored line (“straight body”) with a thin line at the top and/or bottom (see “Candlestick Basics” image below). This thinner line is called the upper/lower shadow or upper/lower heart. The actual body (the thicker part) represents the opening and closing prices of the candlestick. While the shadow / heart (thin vertical line) represents the high and low prices of the candlestick period. The candlesticks come in two classic color styles (green/red or white/black). If the actual body is black/red, it means the close was smaller than the open – the price went down. If it is white/green, it means the close was higher than the open – price went up.
Image by author Each candlestick gives you 5 data points for each day (or each time frame), which are:
For example, let’s say you were looking for a daily chart of a Bitcoin candlestick, where each candlestick represents a day. You choose a day and look at his candlestick. You notice that it is green, so at least you know that the closing price was higher than the opening price.
Hover over the bottom of the actual body and follow the horizontal line to the vertical axis… the price was $7,000 per BTC. And the closing price? Look at the upper right body, it was $7,125 per BTC… not bad. Next, you want to see the lowest price of the day, so look at the lower shadow and see that it is $6,982 per BTC. Finally, you want to see the highest price of the day, so look at the top shadow. To your surprise, you are looking at $1,000,000 per BTC (at moooo!). Ok, that probably won’t happen, but it’s just an example. Now you know how to read a candlestick chart. You are well on your way (hopefully) to making successful cryptocurrency trades. But you more than likely need a lot of training and practice if you want to become a successful trader.
What Is Volume In Cryptocurrency?
Reading crypto candlestick charts may seem difficult at first, but they really aren’t that difficult. The hardest part is learning and recognizing the patterns and art of the industry. Here are more resources for mastering the candlestick chart: – Candlestick Charts: THE ESSENTIAL Beginner’s Guide to Reading Candlestick Charts – The Ultimate Course in Trading Candlestick Patterns
Your exchange may have live crypto charts that you can explore. If not, you can easily check Tradeview.com to get a better idea of all the card possibilities.
We’ll make this short and sweet (almost in a moment) because bar charts are very similar to candlestick charts.
Investopedia.com Commodity Chart – Screenshot by author A commodity chart has the same basic elements, including bars (1) instead of candlesticks, the right vertical axis and price (2), get the current price (3) by hovering over a certain point and the lower horizontal axis with date (4). The difference is only in the tape.
How To Read Crypto Charts And Candles
Photo by author The band is available in two classic color styles (1), green/red or black. Just like candlesticks, a green bar means that the closing price (2) was higher than the opening price (3), and a red bar means the opposite. In the classic black bar you have to determine whether it is ascending or descending based on the position of the left and right hands. The left hand (4) shows the opening price and the right hand (5) shows the closing price. The highest price (6) is determined by the highest point of the bar and the lowest