How to Read Crypto Charts
Charts might look intimidating, but they're just visual stories of price over time. Here's how to read them.
Understanding Candlesticks
Candlestick charts are the most popular way to view price. Each "candle" shows price action over a time period.
Parts of a Candlestick:
- Body - The thick part showing open and close price
- Wicks (shadows) - Thin lines showing high and low
- Green candle - Price went UP (closed higher than opened)
- Red candle - Price went DOWN (closed lower than opened)
Bottom of body = opening price
Top of body = closing price
Top wick = highest price reached
Bottom wick = lowest price reached
Timeframes:
- 1m, 5m, 15m - For day traders (very volatile)
- 1H, 4H - For swing traders
- 1D, 1W - For long-term investors (recommended for beginners)
Beginners should focus on daily (1D) charts. Shorter timeframes are noisy and can lead to emotional decisions.
Support and Resistance
These are price levels where buying or selling tends to cluster.
Support
A price level where buying pressure tends to stop the price from falling further. Think of it as a "floor."
- Price bounces up from this level multiple times
- Buyers see it as a good entry point
- When support breaks, price often drops significantly
Resistance
A price level where selling pressure tends to stop the price from rising further. Think of it as a "ceiling."
- Price gets rejected from this level multiple times
- Sellers see it as a good exit point
- When resistance breaks, price often rises significantly
When support breaks, it often becomes resistance. When resistance breaks, it often becomes support. This is one of the most reliable patterns in trading.
Reading Volume
Volume shows how much was traded during a period. It's usually displayed as bars below the price chart.
What Volume Tells You:
- High volume + price up = Strong buying, trend likely to continue
- High volume + price down = Strong selling, trend likely to continue
- Low volume + price up = Weak rally, might reverse
- Low volume + price down = Weak selloff, might reverse
A breakout with low volume is suspicious. A breakout with high volume is more likely to be real. Always check volume when price makes a big move.
Volume Spikes:
Sudden huge volume often indicates:
- Major news event
- Whale activity (large buyers/sellers)
- Possible trend reversal
- End of a move (climax)
Basic Chart Patterns
Some patterns tend to predict what price will do next. Here are the most reliable:
Trend Patterns:
- Higher highs + higher lows = Uptrend (bullish)
- Lower highs + lower lows = Downtrend (bearish)
- Sideways movement = Consolidation (waiting for direction)
Reversal Patterns:
- Double top - Price hits resistance twice, then falls
- Double bottom - Price hits support twice, then rises
- Head and shoulders - Three peaks, middle highest, signals reversal
Continuation Patterns:
- Triangle - Price consolidates in a narrowing range, then breaks out
- Flag - Brief pause in a trend before continuation
Charts show probabilities, not certainties. Patterns fail regularly. Never bet everything on a pattern. Always use stop losses.
TradingView (tradingview.com) is the most popular free charting platform. You can practice reading charts on any cryptocurrency.