Cryptocurrency is the future. When we talk about crypto, we talk about a whole new system of money that is outside what we currently use in our banking system. Cryptocurrency is based off of a technology called blockchain. When you look at crypto charts, it can often be confusing and a bit jargon heavy.
Here, we will cut through the technicalities and give a clear concise means to read the charts:
Timeframe
The first thing you have to know is what time frame you are looking at. Based off of your range, you can be looking at the Price variability of one hour, one day, one month, or one year. Be sure to look at the X axis and the demarcations of each candle stick. There, you will know what kind of timeframe you’re looking at. The purpose for these time frames are they inform traders of a pattern happening in real time. If you are an experienced trader, the minutes and hours mean a lot. If you’re looking for a long-term investment, stick to the month-to-month.
Price
More often than not, your Y axis is going to compose of the price. You’re going to see the highs and lows according to the range you said it. Once again, if you’re looking at the minutes an hour, you’re probably going to have a smaller price variability on your Y axis. It is not very likely that the price of any cryptocurrency will fall or rise significantly relative to the amount that you own.
CandlesticksÂ
When we talk about candlesticks, we’re talking about those red and green lines that we see across the chart. Those represent the highs and lows of price within a certain timeframe. You can see the shift within your specific range change by watching where on the chart your candlesticks are. If the closing price of your crypto asset is higher than the opening price within the timeframe you select, the candlestick will appear green. If the closing price of your crypto asset is lower than the opening price within the timeframe, your candlestick will appear red. Trends appear, when you watch the green and red candlesticks move up and down the price over the time you select.
Reading a crypto chart is very similar to reading any that of any publicly traded stock. All the variables are the same within the chart. What changes are the market caps, P/E ratio, international opinions, and other factors that affect how well cryptocurrency does. If you know how to read the chart, and with the handy guide above, you can make decisions based off of informed and calculated moves. Good luck, and happy trading.
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