bitcoin chart

Bitcoin Charts Explained

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The cryptocurrency market also works in the same way as the world stock exchange. On the chart, you will see exactly the same price fluctuations as on securities or Forex, although there is a distinct feature. To know how to read cryptocurrency charts, you first need to master the understanding of what “Сandlestick chart” or “Line chart” are and how technical analysis models are built on them. Market charts make it possible to smooth out the behavior of the crowd on the stock exchange, to understand which forces, to which they distribute their positions.

An experienced trader will spend a little time looking at the chart for a BTC, ETH or other asset, and a beginner is at great risk for money. Exchange schedules are the most important tool of market analysis, as they present price information in a graphical, visual version, which is the easiest for a general understanding of the market situation than textual or digital information. They allow you to see the mass behavior of the crowd, as well as to assess the balance of power between sellers and buyers, which ultimately makes it possible to understand the potential profitability of transactions.

bitcoin chart

Understanding Bitcoin charts

Types of Bitcoin charts

There are three types of charts: a line chart, a histogram and a chart called “candlestick chart”

Line chart

This is the basic schedule that a trader has to deal with – it is simply a change in the parameter of a cryptocurrency over time. A chart can track various cryptocurrency parameters, for example, its price or market share. Using such a chart, one can judge the profitability of a coin on the horizon of a month, week, day, or even the last hour.

Candlestick chart

A candlestick chart, or candlestick chart, is also used to describe the price movements of securities, currencies or derivatives; usually, each candle is one day. Among cryptocurrency traders, such charts are the most popular. They are intended for advanced traders, but it is not difficult to understand them. Each “candle” on the chart shows the opening price, the lowest and highest price for a given period of time, as well as the closing price.

Where to find Bitcoin charts

It is a very useful and necessary tool for traders so most of the wallets and exchanges have some sort of charts in their interfaces, but there are also dedicated platforms solely for charts:

How to understand Bitcoin charts

Each chart has its own properties and after we found out how to find chart platforms, now it is time to learn how to read them.

Line charts

In the linear chart, everything is simple and intuitive, everything is as you see. The upper point of the vertical line here is the highest, and the lower – the lowest price for a certain period of time. The left bar shows the opening price, and the right bar – the close.

Candlestick charts

The size and color of the body of the candle, as well as the length of the shade or wick, are very important because they demonstrate current trends, as well as indicate reversals and future price movements. The candlestick color indicates whether the closing price was higher than the opening price (usually in this case green is used) or lower (usually red). Wicks or shadows, that is, the thin lines that come out of the body of the candle up or down, show the lowest and highest price for the selected period.

bitcoin chart

Holding and margin trading

Now that you can read charts, you can follow trends every day. Diagrams are very helpful in this because they allow us to estimate the dynamics and not just the current price value.

Recap

However, price analysis is only part of the task, because it is equally important to understand the causes of sudden highs and lows. So do not forget to follow the news that may affect the state of the cryptocurrency market – if something significant happens, no graphs will help to predict the subsequent price jump.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.