Learn how to read Bitcoin charts in this post. I remember when I was new to the crypto world, I see these crypto charts as jargon.
I went from one blog to another, searching for reading bitcoin charts, but everything looked so tough to comprehend.
I had to settle down, relax my mind and pay attention to every detail of any material I laid my hands upon before I finally understood how to read these charts.
You won’t be going through the same stress because this article has been structured so that even a dummy in the crypto world would understand how to read bitcoin charts.
Nevertheless, you still need to pay attention to fully get this.
What Is A Bitcoin Chart?
A bitcoin chart is a set of data that reflects past prices.
Many people like to use it to aid decisions and analysis about the market moment, such as trend detection.
This chart is also used to track other cryptocurrencies.
How To Read Bitcoin Charts – Candlesticks
The most used chart for analysis is the Candlestick Chart, which is the type of chart that provides complete information for the period: maximum and minimum prices, in addition to opening and closing prices.
This chart represents the price fluctuation in the period selected, usually represented by green and red candlesticks.
When the candle is red, the closing price is lower than the opening price; thereby, the asset price decreases.
If the “body” is green, it means that the price has gone up or is going up, so the asset price is also increased.
The tracings that are outside your body represent the maximum and minimum quotas for the period.
Below is some information you extract from the candlestick chart;
- Body: the difference between opening and closing price
- Opening: first trade occurred within the time interval;
- Close: last trade within the specified range;
- Maximum: maximum quotation reached, even if momentary;
- Minimum: Lowest price negotiated within the period.
It is necessary to understand that each candle represents an interval, which varies according to your selection.
This time interval can be changed in the upper left corner of the screen in the app. The range represented by each candle depends solely on the selection made by you.
Bitcoin Technical Analysis
Technical analysis is a branch developed from graphics and statistical study to assist in decision-making to buy or sell.
However, this type of analysis can be tricky for those just starting.
Supports and Resistances
Supports and resistances are very important to price regions. There are large movements in price when it exceeds or falls below these regions.
Support is the price spot where the demand for purchases is strong enough to “hold” prices, so they don’t fall. It is the region where buyers outnumber sellers and defend that price level.
Resistance can be seen as a region where the demand for purchases does not bring enough strength to the market for continued price increases.
That’s when sellers outnumber buyers and manage to hold on to prices
RSI stands for Relative Strength Index. This indicator measures the buying and selling forces of the market. Many analysts use this indicator to detect high and low points and possible market reversal points.
If the RSI is between 30 and 70, it means that the forces are relatively balanced.
If this indicator signals below 30, it means that the market is under very strong pressure from buyers; it would be a good time to buy.
On the other hand, if the RSI is marking above 70 points, the indicator will signal strong buying pressure. That is, maybe it’s time to make a timely blessing.
Reading bitcoin charts helps forecast the best time to invest, knowing the market trend, knowing the total profit and loss in the previous charts, and many more.
Therefore, understanding how to read it is very important for anyone who wants to become a successful trader, which I believe you already do.
So don’t hesitate to share this article with your colleagues online who might also be searching for how to read bitcoin charts.
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