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Bitcoin a line chart is not enough for stock market investors. They use charts, where price changes mean candles (as below). How to correctly read such a graph? What do wicks mean, as evidenced by the body? We invite you to familiarize yourself with our guide.
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Bitcoin chart - current rate, quotes
Each major cryptocurrency exchange puts a price change graph on its pages. However, most often such charts have limited possibilities of modifications and analyzes. Bitcoin chart is also available on cryptocurrency indexing websites CoinMarketCap and CoinPaprica. There we will find collective data from all exchanges that list a given cryptocurrency. Unfortunately, the charts published there are not very legible. Better charts offers Binance Infohowever, our analyzes and forecasts will not be there either. That is why it is worth using a dedicated portal.
The most popular portal for professional investors in the world to analyze the price changes of various assets is tradingview. It is worth to set up a free account there, to have at hand handy currency pairs (and quotations of other assets), and also to save our drawings on charts.
In this guide, we'll use examples from the platform tradingview. This is a chart from this platform at the beginning of this article.
We search for the chart that interests us by providing shortcuts indicating the given asset. In this case, we want to display the price change of bitcoin to the stable coiner of the tomex for the Binance exchange. Enter the shortcut Bitcoin, or BTC, and the currency for which bitcoin is purchased, in this case USDT. We are shown a list of exchanges on which such a currency pair is traded and which charts can be viewed. We choose a stock chart Binance.
Bitcoin graph is a candle
Length of the period and time resolution
Each candle signifies a price change over a period of time. For this reason, we first need to decide how long the time series we are interested in and the variability at what resolution. In the upper left corner of the chart, we select the time period to be covered by one candle (T or W - week, D - day, 1H - 1 hour, etc. 1 month, 1R - 1 year etc.).
Long time series are sometimes displayed on a log scale by clicking on the "log" in the lower right corner of the graph. If the chart is too flattened, we can stretch it vertically by clicking on the price scale (vertical on the right) and dragging it. We can also take advantage of the automatic “auto” adjustment (next to the “log”).
Buying and selling a lot of times during the day bitcoin graph will interest us only for the last 24 hours, but the resolution for several minutes will be important for us. We will choose candles 5 minutes and we will zoom to the last day. By investing in the long term, price changes in the last few years will be important for us, so we will choose candles 1 day or 1 week, because several hours of fluctuations of the course are of no importance to us. Undertaking investment decisions based on a badly matched chart is a frequent mistake of novice investors. A small correction on 5 min candles can cause fear resulting in emotional sales with a loss of cryptocurrencies, which were supposed to be an investment for many weeks.
Bitcoin chart - the meaning of the candles
The candle consists of a body and wicks. The body determines the opening and closing prices of a given time interval, which the candle describes. Wicks reach the highest and lowest values of the price achieved in this period.
E.g. The 1H candle describes the change in price of bitcoin in one hour. The candle was made at the price (opening hours) 11300 $. After 60 minutes, the price was 11400 $. The price has increased in the given time period (1 hour), so the candle is green and its body extends from 11300 to 11400 $.
During this hour, the price has undergone numerous changes. The lowest fell to 11290 $. The wick at the bottom of the candle informs us about the lowest price. The closing price (11400 $) was not the highest price paid for Bitcoin at this time. The price reached even 11432 $, which can be seen in the upper wick.
When the opening price is higher than the price of closing a given candle, i.e. the price in a given period has dropped, then the candle is red.
Below the chart, by default, there are bars specifying the amount of rotation that has occurred on a given candle. The bars have the same colors as the corresponding candles.
Drawing on charts
The tradingview platform offers numerous graph analysis tools. You will most often use drawing options. In the column to the left of the chart you will find icons for tools such as drawing a line, brush, adding text or a scoop. In this way, you can note your observations and mark significant price levels and trend lines.
The tradingview menu is ergonomic and is handled quite intuitively. By using this platform you will quickly remember the distribution of all functions.
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