Cryptocurrency charts are a great way to visualize market data and get perspective on how well certain coins are performing. Crypto charts are a super complicated way of looking at price movements, but the general gist is pretty simple.
The X-axis represents time (hours, days, months), and the Y-axis represents price. Don’t worry, through—the confusing part comes in when you try to interpret what you’re seeing. So I’m going to break down how to read crypto charts by showing you what they look like and explaining what they mean.
As the cryptocurrency boom continues, it’s becoming more important to know how to read cryptocurrency charts in order to make informed decisions about which currencies to invest in and when to sell.
What is a Crypto Chart?
There are many different types of charts used in the financial markets, cryptocurrency charts are no different. Crypto charts are a little different from those you’ll find on sites. They’re a bit more complex, and depending on the crypto exchange you’re using, they might not be as easy to read for the uninitiated.
A cryptocurrency chart is a graphical representation of the price of a given cryptocurrency over time. The information on the chart is usually presented in a way that allows for easy comparison between different cryptocurrencies, as well as between different time frames.
Charts are a visual representation of the price action and volume over a specific period of time. In this post we will discuss some of the most important charts every beginner should know.
The most basic chart type is called a line chart (also known as OHLCV, Open High Low Close Volume or candlestick chart). The line chart shows closes, highs, lows and volumes for each period. A close counts as an end-of-day settlement value at the time that trading closes in that market. The OHLCV is typically used to track the daily performance of an asset.
A bar chart (or bar graph) shows each day with an individual bar made up of the highest and lowest prices within that day. The full price range is displayed with a horizontal line across the full range, but only the price range between the open and close (or vice versa) is displayed on each bar.
Luna (LUNA) is one of the top performing altcoins in recent days. Over the past seven days, LUNA has seen a price increase of more than 100 percent which can be seen in Terra (LUNA) price and charts in various exchanges.
How can you make sense of these complex charts?
Here are some tips to get you started:
1. There’s no universal format. Some crypto exchanges show their prices as a series of bars, while others display numbers and lines. If you’ve never traded before, it can be confusing at first, but don’t let that discourage you—the more you look at these charts, the more familiar they will become to you.
2. It’s helpful to remember that each currency has its own unique pattern and set of rules that govern how its price is expressed on a chart. Some indicators translate differently depending on whether they’re used with USD or ETH, so it’s very important to know what kind of chart you’re looking at when you first start out.
3. If you have time, look up the pattern for whichever chart type you’re trying to read for each cryptocurrency that interests you—there are plenty of resources online to help with this.
The Dow Theory
Dow theory is a market analysis technique that was developed by Charles Henry Dow, a Wall Street Journal founder. It involves measuring the stock market’s movement and then analyzing it in terms of the current conditions.
Dow theory was developed from the Dow Jones Industrial Average. This index was created by Dow to show how well the United States economy was doing. The index is made up of 12 stocks that Dow believed were important to the success of the economy. The most valuable stocks are in this index, because they have a large impact on the overall economy.
When Dow first started using his method, he would analyze these 12 stocks to try and predict how the economy would do over time. He noticed that when these stocks dropped or rose, it seemed to be in relation to each other. He also noticed that these stocks could go down and up together.
The concept of Dow theory is based on the idea that if one goes up, they all must go up or go down together. Based on this idea, he developed two rules; one was called primary trend and the other was called secondary trend and they were used to predict market changes over time. These two rules are what made Dow’s method so successful for so long.
How To Read a Crypto Chart?
A cryptocurrency chart contains a unique set of data points that can be used to identify trends and predict future prices. There are three main types of data points on a chart: candlesticks, indicators and lines. The most basic information on a chart is contained in the candlesticks, which show the opening price, highest price, lowest price and closing price of each day.
Candlesticks also shade areas under them according to whether each price point was above or below the closing price for that day. A candlestick with a long bottom and short top indicates that the closing price was lower than the opening price (and vice versa).
A candlestick chart is the most popular type of chart among cryptocurrency traders. Candlesticks are a Japanese invention that came about in the 1700s. They were originally used for trading rice and other commodities, but have since become more popular in Western trading markets.
There are two main types of candlesticks—the long-legged bearish candle, known as “Marubozu”, and the short-legged bullish candle, known as “Doji”. The Marubozu is one of the most important candlesticks because it shows that the buying pressure was high during the period of time represented by the candle.
In order to qualify as a Marubozu, the body of the candlestick must be entirely white or black. If there is any shading within the body, then it cannot be considered a Marubozu. A doji occurs when an open/close price is exactly at the midpoint of the high/low range for that day.
