How to Read Cryptocurrency Charts
June 24 2021 - 6:41AM
Finscreener.org
As a beginner, youU+02019ll need
to learn how to read crypto charts before you start trading. We
know that understanding technical analysis and all the jargon that
comes with it can be overwhelming for novices. However, we hope
that by reading this article, you’ll learn the fundamentals of
cryptocurrency charts and how to use the basic cryptocurrency
analysis tools in order to succeed in this industry.
If you’d like to
learn more about crypto
investing in general or
follow real-time or delayed data, we recommend browsing through our
website, where you can get acquainted with our stock screener,
earning expectations, most recommended stocks, insider trades, and
much more.
What Are Crypto Candlestick
Charts and Why Use Them?
Crypto charts are a set of lines
and candlestick patterns that represent a cryptocurrencyU+02019s
historical price performance. They can assist you in predicting
future developments and market conditions, allowing you to make
more informed investment decisions.
The main reasons why you should
learn to read and interpret them are:
- they help you recognize business trends quickly
and understand the current condition of the market at a
glance
- they’re used by experts in their research
and
- they form the basis of technical analysis
(TA).
ItU+02019s important to note that
there are two types of candlesticks:
bearish candlesticks
and
bullish candlesticks.
Each candle is made up of colored
rectangles (Real Body) with a pointy line (Wick) whose color is
determined by the marketU+02019s direction. The candle will be
green (or white) if the closing price is higher than the opening
price, indicating a bullish candlestick. The candle will be red (or
black) if the closing price is lower than the opening price,
indicating a bearish candlestick. The candle would have a
horizontal line instead of a rectangle body if the opening and
closing prices are the same.
Time Selection
The crypto candlestick charts
enable you to choose the right time frame for the crypto price
information you want to see. You can select a default time frame of
5 minutes, 15 minutes, 1 hour, 4 hours, regular, weekly, or
monthly, or adjust whatever time frame suits your needs.
Volume
The volume bar will be shown as
the second item on the standard cryptocurrency chart. This feature
demonstrates the amount of trading volume that took place during
the chosen time frame. The greater the purchase and sale pressure,
the longer the volume bar is. A green volume bar indicates growing
interest and purchasing pressure in the coin. A red volume bar, on
the other hand, indicates a drop in interest in the coin and
decreased selling pressure.
Cryptocurrency Analysis
Tools
Although these candlestick price
formations are an excellent way to forecast market movements in the
future, charting tools can be very helpful for establishing your
technical strategy for trading.
Cryptocurrency analysis tools
offer statistical analysis of an assetU+02019s price and volume
fluctuations over time in order to assist traders in detecting
price trends. They help traders in determining how the market
operates, offering a solid foundation for making informed trading
decisions.
Although reading cryptocurrency
charts may appear complex, it is only a matter of examining demand
and supply in the desired market. There are various cryptocurrency
analysis tools on the market for charting, portfolio management,
multiple exchange trading, managing exchange accounts, and altcoin
charting depending, so the next step is to carefully look at the
different options you have and conduct research on what matches
your needs best.
If you are comfortable with
looking at regular stock charts then it would be worth checking
out
Bitcoin Investment Trust’s chart (OTC: GBTC). It’s a traditional OTC but it’s assets consist
of cryptocurrencies, it’s a good middle point between the
traditional market and the crypto market. They are also leading the
way with bringing Bitcoin to institutions.
However, for the purpose of this
article, we picked the following tools as some of the best in terms
of feature, ease of use, and exchange integration.
TradingView
TradingView is a cloud-based charting and social networking
platform appropriate for traders of all levels. The platform
includes all of the features of a premium desktop charting suite,
as well as the speed and versatility of charting on the
go.
It was initially designed to be
used for stock scanning and charting. However, in order to meet the
growing demand for digital currencies, the charting platform has
grown to provide data from a variety of cryptocurrency
exchanges.
Another great tool is the Chaikin
Money Flow indicator. This is the strongest volume indicator that
outperforms the classical volume indicator and should be above the
zero line in the course of a rally, while through sell-offs, it
should be under zero.
Crypto Fear and Greed
Index
The crypto fear and greed index measures investor emotions of fear and greed on
a daily, weekly, monthly, and yearly basis by collecting data and
compiling it into a score and a valuation that is plotted on a
graph for you. Extreme fear is indicated by a sentiment reading of
less than 20 and indicates that investors are concerned about the
cryptocurrency markets. The cryptocurrency price is usually
falling, signaling a potential bullish reversal.
A market sentiment reading above
80, on the other hand, indicates that investors are getting too
greedy. This is very significant because many people believe that
the crypto market is driven by emotions.
Conclusion
To summarize, cryptocurrency trading can be quite profitable if done correctly.
ItU+02019s also important to note that even the most successful
traders make mistakes while attempting to time or forecast the
market. Therefore, you shouldn’t depend solely on these metrics and
charting methods. Instead, you should use them as a reference to
help you make better trading decisions.
Grayscale Bitcoin Trust ... (AMEX:GBTC)
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From Apr 2024 to May 2024
Grayscale Bitcoin Trust ... (AMEX:GBTC)
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