Would you like to learn how to read Crypto charts? Technical analysis is well known to aid investors in identifying any market trends and predicting future movements of prices of different assets. Therefore, technical analysis involves studying statistical trends to know the demand and supply of a specific asset over a certain period. Therefore, reading crypto charts helps investors to make better decisions based on both bullish and bearish movements.
How To Read Crypto Charts
A bullish movement refers to the upward price movement caused by assets’ buyers while a bearish movement is the downward price movement caused by asset sellers. Thus, technical analysis is the best way to evaluate patterns on charts and price trends over time. The crypto charts will always help you to carefully analyze and monitor market movements.
Types of crypto charts
There is a wide range of crypto charts that are available for traders. Cryptocurrency market trends can as well be analyzed in different ways. With the nature of candlesticks, crypto candlesticks charts offer you much-needed information. These charts usually show time on the horizontal axis and private data on the vertical axis. The candlesticks usually show whether the price movement is positive or negative and to what degree.
Also, these candlesticks are made of body and wicks where each body represents the opening and closing prices while the top wick shows how high the price of cryptocurrency got during a certain time frame. They have two colors red and green for different representations. So, a simple structure of candlestick can offer you the much-needed information. The candlestick that has no body nor long wicks will mean that both the buyers and sellers have no control of the market.
Resistance and support levels
You can easily read live cryptocurrency candlestick charts using resistance and support levels. This can be easily identified by the use of trendlines. Trendlines are those lines that are usually drawn on charts through a connection of prices. Support levels usually show price points where cryptocurrencies are expected to come to halt whereas resistance levels show price points where there is concentrated selling interest. You can identify these levels using trendlines since it makes it easier to identify crypto chart patterns.
This is a graphical representation where a line connects the closing price of each day in a readable graphical diagram. The closing price remains to be the single input all across varied timelines. Therefore, a line chart helps to represent the different prices of assets using one single and continuous line. These charts were the first to be used in the past in the financial markets. Its main advantage stands out to be one chart that helps in the reduction of volatile prices during the day making it easier to predict the closing price. These kinds of charts are easy to understand and simple to use therefore it is being used by most traders in the whole world.
Analysis of tools
Whenever you want to trade Bitcoin and other coins, you need some cryptocurrency analysis tools. This is for both beginners and experienced traders. There are different technology tools that you need to combine for more profits. We are assured that these tools will help you to avoid losing your money while making your trade better.
Some of these analysis tools include Free TradingView charting software. It has different features that will make your trade run smoothly. It is very easy to use thus you can trade with peace of mind. Another one is the money flow indicator which has been home to various investors around the world. It naturally shows when the institution is making some purchases or sales.
Reading cryptocurrency charts is a skill that everyone needs to acquire if they want to get through the challenging cryptocurrency markets. These charts will always help you to time the market in the best manner so that they can be used as research tools. After going through our guide, you will see the importance of knowing how to read charts. You will always know the right time to trade and halt your trade. All this occurs when you have better knowledge of how to read charts. Learn more about crypto with our Crypto Beginner’s Guide.