When you first glance at a crypto chart, it is overwhelming. You need a particular degree or superpower to make sense of the information. Truthfully, it’s not as complicated as it looks; it’s all about teaching yourself the elements.
While you’ll obviously surpass the average crypto knowledge the more you learn, your experience level only goes so far. There are only a handful of things to be aware of before you can consider yourself a professional crypto chart reader. The ability to analyze crypto charts boils down to identifying and spotting the differences in how specific elements within the chart work.
The following article covers the basics of reading a crypto chart like an investor. We’ll discuss the elements you need to know to start mastering the madness. Read on to learn about various trends, momentum indicators, and other elements informing you of crypto prices and rolling the ball in Coin Watch.
The Broader Elements
By tracking broader elements of crypto charts, you can start to identify the information you’re given. Let’s look at trend indicators. Trend indicators give the trader information regarding the market direction, i.e., (up, down, stagnant, etc.).
Indicators Of Crypto Prices
Okay, so now you know that you can detect a general trend.
- Moving on, let’s look at the momentum indicator. Momentum indicators tell you whether an asset is overbought or oversold—simple enough.
- Volume indicators let you know the activity level within that market, which enables you to tell if crypto prices are likely to increase or decrease (think in terms of demand here).
- Next, we have volatility indicators that measure the degree to which a token moves in the context of its mean price. Low volatility indicates modest crypto prices, and swings you can predict, and high volatility suggests the opposite nature.
- Lastly, support and resistance indicators determine if and when a pause in crypto prices will occur or if a trend is reversing.
Note: All of the elements are charted visually. You can note timeframes and the indicator making up two primary variables.
Recognize the shapes.
After you’ve learned the elements that teach you to identify and understand crypto charts, the next thing to do is learn to recognize what a collection of shapes informs you of. There are different styles of charts to consider, but for these purposes, we will be talking about candlestick patterns.
The candlesticks patterns you deal with will often show up consistently enough that you can identify the shape to spot trading insights correctly. There are even nicknames given to the patterns, such as “bullish,” “shooting star,” and “hanging man.”
Learn the basics, then advance your knowledge.
Once you’ve learned how to apply the elements and collection patterns, you can start analyzing and understanding the information you find to make wise investment choices. Continue advancing your knowledge of terminology to start assessing crypto prices as they relate to resistance and support levels.
