If you’re an investor looking to make good money in the current market, then crypto might actually be a great space to check out. But as a newbie, where do you even start?
Believe it or not, crypto trading is actually a lot like stock trading. Like the latter, reading charts and graphs, which usually track price changes over time, is an essential skill for a crypto trader. With this skill, you can predict future price patterns and shifts more accurately and capitalize on them to make profits.
So, how exactly can you read a crypto chart from popular crypto tracking sites like Coin Watch? Here are some pointers for beginners:
The Basics
Typically, the first thing you see on a crypto token tracking platform is the list of tracked tokens. This comes along with information such as the real-time price, 24-hour change, liquidity, market capitalization, and, of course, the network it runs on.
Now, this information only provides a quick overview. To access the price chart, you need to click on the actual coin or token you want to analyze. A chart should look more or less like a graph, with the vertical axis representing the crypto’s value in USD and the horizontal axis representing the time.
In addition to the crypto’s value in your USD, the other important information on the page is the trading or liquidity pairs. Basically, this refers to crypto-to-crypto trading rather than converting to cash. For example, ETH/USDC.
Reading Price on a Crypto Chart
A cryptocurrency chart is there to help traders view and analyze the price of a token or coin over time. That means you can see not only the price as of now but historical prices as well. So, to track past prices for a specific time, say, the last month, look to the top of the chart.
Usually, you will find options for the last day, week, month, quarter and even year. You can even go back years, as far back as the token’s launch.
Once that’s set, the chart immediately refreshes to show what you want. Now, all you have to do is hover over the line to check out the price at a specific time. You can also zoom in or out of the chart to spot patterns.
Interpreting Crypto Charts: Support & Resistance
There are many ways to interpret crypto price chart readings, with each investor developing a unique strategy over time. As a beginner, the most important concepts you want to master first are support and resistance, as they can help you identify price patterns and know what they mean.
Support is the lowest price level a token reaches before it starts rising. At this point, the demand starts to surpass supply, pushing the price up. Conversely, resistance is the highest price level a token attains before it starts falling. In this case, the supply exceeds demand, and with more sellers than those willing to buy, the price starts to fall.
Identifying where support and resistance occur can help you determine when to buy in and sell, respectively.
Learn to Read Crypto Charts for Better Investment Decisions
Investing is the only way to grow your money and attain financial freedom. However, you need to invest wisely to realize this. Knowing how to read charts is the most important skill you can possess as an investor in crypto.
Crypto-currencies have seen an unprecedented surge in price, usage and popularity lately. People looking to invest in digital assets have begun to flock towards it, driving up the demand for knowledge on how to properly read and understand crypto charts and track their investments. There are several aspects to consider when reading crypto charts and understanding the data they portray. This article will serve as a handy guide for beginners on how to properly read a crypto chart.
The first element of reading crypto charts is observing the currency’s trading patterns. Looking at the charts can provide valuable insight into how regularly the currency is traded, when its highest and lowest points have been in the past, and what direction the overall trend of the market is headed. Additionally, looking for patterns in the charts, be they Fibonacci, Elliot Wave, or other commonly used indicators, can also offer greater clarity into the direction of a currency’s trading.
The second element of reading crypto charts requires understanding the technical parameters of the chart. This includes looking at the various indicators, such as moving averages, relative strength index (RSI), and volume among others, and how they are influencing the performance of the currency. For example, if the volume is high during a particular period of time, that could be indicative of a surge in the market. Understanding how these various parameters influence the currency’s performance can provide important insight for traders.
The third and final element of reading crypto charts is understanding the impact of market news. News related to a particular crypto-currency, whether it be good or bad, can have a significant impact on the currency’s trading performance, often within a matter of hours. Thus, keeping tabs on the news related to a crypto-currency can provide traders with actionable information to take advantage of market opportunities or exits as needed.
All in all, crypto charts provide valuable data about the performance of a currency. With some practice and knowledge of technical indicators, it is possible to gain further insight into the direction of a currency and its market trends. This article serves as a handy guide to reading crypto charts, and we hope it has provided you with the knowledge required to make the most informed decisions for your investments.
