A beginners guide to reading crypto charts

Have you ever stared at a crypto graph and wondered what they all mean? If you want to trade or keep your coins wisely, then understanding crypto charts is the first and most important step. 

Crypto charts are important if you own coins and want to trade them. Learning how to read crypto charts helps you find the best opportunities in the highly volatile market. 

The crypto chart guide shows the movement in the industry that is caused by external factors like inflation and the coins’ natural volatility. To read crypto charts, most use technical analysis to make things easier. Technical analysis uses market-driven data like trading volumes, patterns, and indices to provide crucial info about the best crypto trading options in the market. 

There is more to chart analysis than you think. If you want to trade your crypto at the right prices to yield the best profits, here is everything you need to know to learn on how to read crypto charts: 

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What makes up a crypto chart?

Crypto exchanges show the update in prices for any trading pair. Most of the time, the trading pair is set to US dollar or the crypto you are looking at by default. However, you can also set the prices to other coins you have. 

When reading crypto charts, there are certain things you need to pinpoint first before understanding what they are really presenting in real time. Below are some of the most common parts of a crypto chart every trader should know: 

• Trading pair - It shows the base currency used and the quote currency in a particular market. The quote currency helps evaluate the base currency by being the secondary index in determining short term prices.
• Current price - The current price is the prevailing value for the base currency being bought or traded in the exchange for the quote currency. This also shows how much the prices have gone up in the last 24 hours. This data can change dramatically depending on how active or dormant the market is.
• High/low - Highs and lows are indicators that show you the highest and lowest prices in the last 24 hours.
• 24H Vol - This figure shows how much an asset has been traded over the last 24 hours. This is expressed in the form of the quote currency.
• Unit of time - To see the general prices at specific increments, you can toggle the unit of time so you’ll see the bigger picture of how your crypto moves in certain periods.
• Price chart - The price chart visualises the rise and fall of a crypto’s value over time in the market.
• Trading volume - The trading volume shows how many trades occurred during the day. Longer bars tell you that the volume of trades is higher than what it was the day before. 
   

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Understanding candlestick charts 

A candlestick is the main price index in crypto charts. Every candlestick shows the price activity in one unit in time. The candlestick consists of two main parts: 

• The body - This shows the opening and closing prices of a crypto asset.
• The wick - This shows the highest and lowest price points of a given crypto.  
   

Candlesticks crypto charts make it easier for users to read the movements in the market as they happen in real time. With visual markers and distinct characteristics, you can accurately discern each occurrence in the market when you trade your tokens. 

How to read candlesticks charts crypto 

In a lot of crypto candlestick charts, a green candle shows that the market is in a bullish state as the prices increase upwards. On the other hand, a red candle shows the bearish movement in the market and shows price decreases across the board. 

Based on some analyses on the price and the volume data that the industry generates each day, technical analysts have made a few chart-based indicators to help them assess the potential of the market.Reading the connection between these two candle types is one of the most basic ways of reading candlestick charts. Another way is to monitor price movements of different cryptocurrencies.

Common crypto chart patterns

Candlestick or crypto chart patterns are usually placed under bullish and bearish categories. A bullish pattern shows future upward price movements that tells traders to buy in hopes that the value will increase later. 

Inversely, a bearish pattern suggests to traders to sell now to yield the current price after it will soon fall in value. However, there are other patterns that go beyond the simple bearish and bullish types. Sometimes they can be a combination of both with one being more dominant than the other. Below are some examples: 

• Shooting star candlestick - The shooting star candlestick is a bearish pattern that is seen at the end of a price uptrend. It has a short body that’s seen near the bottom and a long wick that extends upwards. This indicates that the price slightly decreased by the end of the trading period.
• Inverted hammer candlestick - This type is similar to shooting star candlestick, but is a bullish pattern instead. This time, the candle shows the price slightly increasing by the end of the trading period after reaching higher values.
• Head and shoulders crypto charts - The head and shoulders pattern is shown through three peaks or ‘valleys’ that are stacked up next to each other. The second peak looks like a ‘head’ that is bigger than the adjacent two on both sides which are known as the ‘shoulders’.
• Wedges - Just like the head and shoulders chart, crypto wedges are patterns that involve a wider point of view. You can trace wedges by drawing a line that connects the bottom prices of the movement over a period of time and another line that traces the highest points. 
   

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Crypto market chart: Differences between bull and bear markets

If you are just starting to get the grasp of how to read crypto charts, then you should learn what bear and bull markets are. By knowing these concepts, you are priming yourself to be better at reading depth chart crypto. Here is how each market differs from one another: 

Bull market 

A bull market means an increase in prices. Distribution-wise, sentiments are rather negative while public participation deems to be favourable when people buy more in the market. During a panic, people will start selling their coins in hopes to make the most out of a positive position in the industry. 

Bear market 

Inversely to a bull market, a bear market is where all of the values start to decline. This is not a favourable circumstance for crypto users because they will be experiencing losses during this economic period. Distribution-wise, there are positive sentiments because more action leads to better stability in the market. 

Also, public participation is in favour of selling their crypto rather than buying them. A panic results in crypto users getting opportunistic when values are at their lowest to buy cheaper coins. 

There is no guarantee that these definitive events will occur in both markets. They are only visible trends that the history of the crypto market charts have witnessed throughout the years. 

Market trends under both bull and bear markets

Traders can find a lot of potential when looking at the different market crypto chart trends. For instance, there are bullish and bearish market trends that help crypto users make predictions easier. 

Within these bearish and bullish trends are different types that make deeper meaning to how the prices really move in the industry. Below are the three kinds of market trends associated with the bearish and bullish patterns: 

• Primary trends - This type of trend can either be bearish or bullish. In other words, they can move up or down on the charts.
• Secondary trends - The secondary trend works against the primary trend. This type can be pullbacks in the bull market or rallies in the bear market.
• Tertiary trends - Tertiary trends last a week or a little over that and are considered noise in the market that can be ignored since they don’t affect the industry in the long run.
   

Ways to monitor crypto charts

The next step in reading crypto charts is knowing the ways to monitor each trend in the market. There are a lot of easy ways for you to do this, and they are: 

Live crypto price watches online 

If you have a stable internet connection, there are live crypto price watches websites that help track down the movement in the market. They appear in real time and have served a lot of traders when it comes to monitoring. The best part is that it’s completely free as well. 

Crypto charts app 

A crypto charts app is the mobile version of a live crypto watch. What’s great about these types of crypto chart apps is that they are more seamless and easier to use than the website. It’s convenient for those who want to operate trading and monitoring directly from their smartphones.

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Are you ready to trade your crypto the right way? Find different methods to grow your crypto by reading blogs and articles from Gamdom to get you started. If you enjoy sports betting and casino gaming using your coins, then Gamdom is the perfect site for you to use your crypto assets. 

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Words: Vonn Consul