Cryptocurrency charts on the exchange: reading and analyzing them

Cryptocurrency charts on the exchange: reading and analyzing them

Image of stock charts


Every trader is well aware that a cryptocurrency chart is the most informative source of data on their price and prospects.  But how do you learn to recognize key graphic information?  This material will tell you what a stock chart is and how to use it to improve trading efficiency.


What is a cryptocurrency chart


In the traditional sense, a digital currency chart is a display of the history of its value relative to another asset for a period of time (timeframe) selected by a cryptocurrency trader.  In addition to price charts, there are also charts of liquidity, trading volume or capitalization of a particular coin.


Varieties of charts


There are 3 main types of cryptocurrency charts that can be displayed in all types of trading terminals.  Each of them has its own characteristics and functions, therefore, to complete the picture, experts analyze graphic information in a comprehensive manner.


Line chart


This type of chart is considered basic on most cryptocurrency platforms.  It is a curve that reflects a specific parameter of a coin for a specific period.  From it you can find out the price of the coin, its profitability or turnover per day / week / month / year.


The linear display of the chart allows you to analyze the price of an asset, since it can be used to track both the rate of changes in the cryptocurrency and the main trends in value movement.


Cryptocurrency chart with bars

Such a graph includes vertical and horizontal lines.  The first of them talk about the actual change in the price of the asset, and the second - about opening and closing deals.  It works like this:


  •      • the vertical jet at the upper point indicates the maximum price of the asset for the specified period, and the lower one, respectively - the minimum;
  •      • the left horizontal line is at the level of opening deals;
  •      • right horizontal - shows the closing price of transactions.

On a cryptocurrency exchange, bars in a chart are often used to analyze an asset's trend.  For example, if the right horizontal in a bar is higher than the left, then the cryptocurrency is growing in price, and such a bar turns green.  If the closing price of transactions is lower than the opening price, the bar turns red.


Japanese candles

A candlestick chart is a lot like a bar chart.  The upper vertical line of the candlestick is at the maximum price of the asset and is called the "wick".  The bottom vertical is called the "shadow" and indicates the minimum value.

The upper horizontal edge of the candlestick means the level of closing deals in case the candlestick is green, or the level of their opening when the candlestick is red.  Accordingly, the lower edge shows the open price if the candlestick is green, or the close price if the candlestick is red.

What can you learn from the cryptocurrency chart on the exchange

In fact, main and auxiliary charts are the key tools of a trader on the exchange.  Cryptocurrency is a very mobile asset, so it is more convenient and practical to learn about its changes thanks to the charts.  For example, if an investor wants to invest in a Bitcoin coin, he must first find out its price, analyze the cryptocurrency chart, study its main trends, trading volumes and capitalization.  All this data is displayed graphically and in real time.


How to read and analyze charts on the stock exchange

To read a cryptocurrency chart, traders use both direct data and indicators for the cryptocurrency, which allow them to study and predict its movements in more detail.

Typically, charts are read from left to right and bottom to top.  This applies both to the main charts and to such indicators as RSI, MA and Fibonacci, which will be devoted to a separate article.  Namely these tools that are needed to analyze the chart and build a strategy.  They indicate reversal points in the chart and also allow you to calculate the strength of the trend.

The main charts of digital currencies are divided into patterns of a characteristic form.  For example, the classic “Cup with a handle” pattern indicates a reversal of the upward trend, while the “Head and Shoulders” and “Double Top” patterns indicate a further decline or even a collapse of the asset value.



Correct reading of stock charts is the key to successful trading.  These tools are universal for any trading platform, and by studying the graphical mechanics, you can significantly increase the profitability of transactions on the exchange, even in the very early stages of learning.



Published 02 Dec 2020