In this article, users will be able to understand how to read Crypto charts. If you’re like most crypto investors, you’re always looking for new ways to track and analyze the performance of your portfolio. One tool that’s been growing in popularity lately is crypto charts.
Crypto charts can give you a snapshot of how different cryptocurrencies are performing relative to each other, as well as against traditional assets like stocks and gold.
By tracking the trends in crypto charts, you can make more informed investment decisions and stay ahead of the competition.
This blog post will go through what crypto charts are, how they work, and what you need to know about crypto charting software before using it.
Understanding Crypto Charts
Cryptocurrency charts are a visual representation of the trading history of cryptocurrencies. They provide an overview of price movements and allow you to see trends over time and compare crypto coins against one another.
Cryptocurrencies can be volatile and unpredictable, so it is essential to understand how crypto charts work before investing any money into them.
How to Analyze A Cryptocurrency to Determine it’s Potentials
Below is a guide on how ti analyze a cryptocurrency
#1. Scrutinize the token’s whitepaper
The whitepaper for a token contains the team’s goals for the project and the token’s use cases. As a result, you’ll be able to tell if your objectives are realistic.
#2. Assess the team behind the project
After learning about the project’s offering, the next step is to evaluate the team behind it. Has anyone ever worked on a respected project? Are they trustworthy participants in the blockchain ecosystem? What are their credentials?
Keeping a close check on the token’s community on social media is proven to invest in an ICO. This is where you’ll find out if the project has a large community behind it. To begin, use Facebook, Twitter, Telegram, and Reddit.
#4. Determine the legality of the situation
So you’ve found a great token’s ICO to invest in, but your country prevents you from doing so. If you went ahead and invested anyhow, you’d be breaking the law.
#5. Check if the token’s project addresses a significant need.
Verifying this is another crucial point to consider when analyzing a token you’re considering investing in, as it determines the utility value of a token’s market value.
So, as a wise investor, you should ask yourself before investing in a token: What unique problem does this token solve?
#6. Find individuals you can trust.
True, you may be swamped with work and don’t always have time to review each job thoroughly, and it should not be done at your expense if such is the case.
#7. Stay up to date with the token’s project announcements.
When your money is on the line, you don’t want to invest in a token and then fall asleep. As a result, it’s a good idea to keep up with the project on various social media platforms. These channels will keep you up to date with the most recent announcements.
#8. Appropriate timing
It’s all about the timing. It may be last on the list, but it’s just as important because the optimal timing to invest can have a significant impact on your investment return.
As a result, given that there are bear and bull markets, you need to know when is the best moment to buy cryptocurrencies.
How to Read Cryptocurrency Trend Lines
When reading trend lines, you’ll want to look for the “slope.” This is your prediction for how the price will most likely move. An uptrend line indicates a positive slope.
As a result, the price of cryptocurrencies is likely to rise. Remember that the trend line should include at least three connecting points before considering it valid.
How to Calculate Percentage Increase in Cryptocurrency
An essential skill for geographers is the ability to calculate percentage increases. When geographers collect data over time, their findings may improve.
A geographer can see how much their data has changed by calculating a percentage increase.
It could be helpful to know how much the width of a river channel widens as you travel downstream, for example.
Calculate the difference between the two numbers under consideration.
Multiply the result by 100 after dividing the increase by the original number.
In summary, a percentage increase is a 100 percent increase in the original figure.
The number of robins in a forest area, for example, is tallied throughout two months. Fifteen robins were counted in December, and 23 robins were counted in January. What is the percentage of robins in the woods that have increased?
There is an eight-digit discrepancy between the two numbers.
53.3 = 8 x 15 x 100
The number of robins in the woods has increased by 53.3 percent.
What Are Indicators and How Do They Work?
Traders utilize indicators to predict how the market will move. They can be used to display price patterns. Then, strategies to exploit these patterns can be designed.
They’re also utilized to stay on top of any breaking news or market developments that could affect the price.
Relative Strength Index (RSI)
The RSI is the best indicator, and it’s also my favorite, and it’s the one I use the most for generating quick alerts for potential entry locations.
The real strength of a trend is measured by this indicator, which is divided into levels. The most crucial RSI levels are usually believed to be 30 and 70.
How to Read Crypto Candlestick Charts
What are candlestick charts, and how do they work?
Traders use candlestick charts to show the price evolution of an item in the most basic sense. While candlesticks are more challenging to grasp at first, they provide significantly more information than a basic line chart.
When a candle is red, it means the asset’s closing price was lower than the opening price during that trading period. When a candle turns green, it means the asset’s price has increased, and the closing price was higher than the initial price.
The body shows the open-to-close range. Put another way, and it shows the difference between the closing and beginning prices.
Wicks are sometimes known as tails or shadows. They show the asset’s highest and lowest price during the candlestick period. If there is no wick, the lowest and highest values represent the opening and closing prices.
The highest price exchanged throughout the period is indicated by the top of the upper wick.
Lowest Price: The bottom of the lower wick indicates the lowest price traded during the period.
The opening price is when the first trade of the new candlestick period occurred. When the price rises, the candle turns green, and when the price falls, the candle turns red.
The closing price is the last exchanged during the candle formation period. The candle will be green if the price is higher than the opening price; else, it will be red.
How to Read Cryptocurrency Prices
The cryptocurrency market is fast-moving, with prices changing dramatically in just minutes. One of the best ways to stay up to date on what’s happening with your investments is by using cryptocurrency charts.
To read cryptocurrency prices, you will need an app compatible with the coins you want to track, and CoinMarketCap has a list of apps for all major operating systems.
Once you have downloaded an app and logged in to your account, click on the “Charts” tab at the top of the page. You can then select from different currencies or types of charts (line chart, price per coin).
The default time frame is one day; however, if you want more data points, change it by clicking on “change date range” and selecting your preferred time frame.
How to Read Crypto Charts Binance
Before we further understand the Binance chart, you should know a little about Dow Theory as a beginner.
The cryptocurrency market considers everything during its pricing, and both previous, new, and upcoming information has already been factored into asset prices.
When it involves crypto, the items considered multiple variables like current, past, and future demands and any regulations that may impact the crypto market.
The Three Movements of the Market
Out of the three movements, the primary movement is the leading movement that can last from less than a year to several years, depending on the bullish or bearish.
The second movement is the medium swing which can last ten days to three months.
The final movement is the short swing or minor movement that varies according to market speculation from hours to a month or more.
These are the three movements that can happen simultaneously.
Three Phases of Market Trends
Like Three movements, there are also three phases of significant market trends.
Accumulation Phase: This is the time when knowledgeable investors begin buying or selling the asset in opposition to the market’s general view. Since those knowledgeable investors are in the minority, the asset price does not change much during this market stage.
Absorption Phase: The market eventually notices these “intelligent investors” and follows their trend. When many people become aware of these phenomena, speculation becomes rampant.
Distribution Phase: Following massive speculation, the price starts to retrace as knowledgeable investors continue to disperse their assets to the market due to the asset’s limited supply. As a result, prices begin to decline in tandem with volume.
Watch the video below to learn how to read Crypto charts:
The stock market discounts all news
The stock market comprises new information as soon as it becomes available. When this information is made public, the asset’s price changes to reflect this further information. The price represents the sum of all the market participants’ hopes, fears, and expectations.
Factors like interest rate movements, earnings expectations, revenue projections, significant elections, significant elections, etc., are all integrated into the market price.
if you’re interested in learning more about analyzing crypto and the different ways to read cryptocurrency trend lines, we recommend reading our blog post. You can also leave a comment below with any questions, and we’ll be happy to answer them for you.