How to Read Crypto Charts
Reading a price chart is the foundation of technical analysis. This guide explains candlesticks, volume, support and resistance, moving averages, and how to spot a trend — with no jargon.
Candlesticks
Each candlestick shows the open, high, low, and close (OHLC) for a time period — one minute, one hour, one day. A green candle means the close was above the open (price went up); a red candle means the close was below the open (price went down). The wicks (shadows) show the highest and lowest prices reached.
Volume
Volume is the number of coins traded in a period. High volume confirms a move — a breakout on high volume is more reliable than one on low volume. Divergence, where price rises but volume falls, can signal a weakening trend.
Support and Resistance
- Support — A price level where buyers historically step in and the price stops falling.
- Resistance — A price level where sellers historically step in and the price stops rising.
- When price breaks through resistance with volume, it often becomes new support — and vice versa.
Moving Averages
Moving averages smooth out price data to show the trend. The 50-day and 200-day averages are the most watched. When the short-term average crosses above the long-term average (a golden cross), traders see it as bullish; the reverse (death cross) is seen as bearish.
Spotting a Trend
- Uptrend — Higher highs and higher lows. Look to buy pullbacks toward support.
- Downtrend — Lower highs and lower lows. Avoid catching falling knives.
- Sideways — Price ranges between support and resistance. Range trading works only with strict stops.