How to Read Cryptocurrency Charts, Analyze Order Books, and Trade Confidently

Although the exact mechanism by which these levels operate as support and resistance is unknown, these ratios are present throughout nature and are extremely powerful. If the market depth for any asset pair is strong, it means that there is substantial volume and orders on the bid or ask side. This further implies that even large orders cannot significantly move the asset price. While weak market depth implies that large orders can move the price of the asset impacting the trader. Sellers are always willing to sell their assets at the highest possible price, and buyers would like to buy them at the lowest possible price.

MACD is a trend-following momentum indicator that can help identify and predict upwards or downwards trends in price. EMA is a moving average of the price that places a higher significance on more recent price changes than older price changes, helping to determine recent trends. The free and open market dictates the price of all crypto assets, but there are technical and fundamental reasons for why prices can change. For example, if an asset is extremely oversold, it could increase just https://www.beaxy.com/instruments/hummingbot/ due to the fact a short term relief bounce is needed. PrimeXBT is available to anyone to register for a free account and deposit BTC to a secure wallet to get started trading. Deposits are made in BTC rather than more complicated methods like a wire transfer. The trading experience includes built in charting software and technical analysis tools to assist with getting a good read on where market price is going. Japanese candlesticks can provide a lot of information in one single candle.

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They are certainly better than relying on gut feeling to make trades. But these methods were also developed during a time when computers were much less powerful than they are today and when many sources of market information were not available. This means there may be better ways of understanding the market today than have been available so far. The Bollinger Bands are a moving average, and its two standard deviations are used to chart a crypto asset’s volatility. Support levels are those areas that have previously seen price action multiple times, such as previous resistances. Support levels often fail to hold, resulting in the establishment of support at even lower levels, as seen below. Cryptocurrencies are often referred to as highly volatile assets.

Fill Calcs helps you determine which exchange will give your specific order size a better price. When there is a big difference between bid vs ask count, this means that more individual traders are trying to buy or sell. This is one way that other traders or bots can manipulate order books to make it appear like there is more interest in buying or selling than there actually is. If the RSI is near or below 30, the price is probably moving downwards but it’s possible that it will be reversing back upwards soon so many traders might consider this time to buy. The chart of the total cryptocurrency market cap looks primed for a major breakout, so altcoins could soon soar.

Order book and market depth chart

Reading simple price index charts is good for a general overview, but if you want to trade, you’ll probably want more data. In conclusion, always look for confluent signals from the volume indicator to support the current trend in price movement. If price is moving downwards, look for increasing volume to support that movement along with decreased volume during the buyback phases. Understanding how to read the volume profile of a trending asset can help you identify possible reversal points. The BTC/USD 15-minute chart below shows a Bitcoin decline from USD5,500 down to USD4,200.

This is article is not hard-and-fast advice, but a guide to trading basics. There is no singular indicator, technique, or method that can predict the market’s direction. This is especially true for candlestick and crypto chart patterns. The Basics of Reading Charts Covered If you are new to crypto trading and learning how to read crypto charts, this is the right place. The support level is the point where prices stop falling and bounce back up, while the resistance level is where prices stop going up and dips down. Trendlines make it easy to identify support and resistance levels as it is easy to recognize crypto chart patterns. Or even alternatively, when trends meet points of resistance or support. But in my experience, the depth chart would always be one of the last things I would look at after gauging the chart’s candlestick patterns and my preferred technical indicators. Aggregating crypto prices from multiple exchanges solves a major problem in the crypto industry. It allows real-time live crypto prices to be visualized on a single site.

Why Do All Crypto Charts Look The Same?

The chart below represents the pricing of Microsoft stock in 2015. The orange line denotes the 50-day moving average, whereas the red line is the 200-day MA. Thankfully, the internet has made using technical indicators so much easier. Pretty much any website that lets you view interactive stock charts has some suite of technical indicators you can activate with just the click of a button.

After recognizing the patterns of the cryptocurrency market, you are likely to predict whether the prices will move up or down with the market behavior. Understanding resistance and support are among the most important aspects of analyzing a crypto chart. The levels of support in charts correspond to a specific price that the asset doesn’t drop below for a particular time. The opposite is that the resistance levels refer to the level at which the asset isn’t likely to increase any further. It is where sellers are more than buyers on the market for the particular digital asset. Experts often recommend support and resistance levels to help traders take a position in cryptocurrency. To read a cryptocurrency chart, a beginner must be affluent in the basics of a crypto chart such as candlesticks, moving averages, and support and resistance levels. A crypto depth chart represents buy and sell orders of a specific asset at different prices, graphically. One of the main characteristics of a depth chart is the “wall” as it can form on the sell or buy sides of the chart. It indicates price levels where the asking value or cumulative bid increases significantly.

Bitcoin depth chart

The Japanese candlestick chart is the second most frequent form after the line chart. Analysts typically favor Japanese candlesticks due to the additional data they can offer. Bitfinex offers order books with top tier liquidity, allowing users to easily exchange Bitcoin, Ethereum, EOS, Litecoin, Ripple, NEO and many other digital assets with minimal slippage. This material does not constitute investment advice, nor is it an offer or solicitation to purchase any cryptocurrency assets. For example, if a trader places a sell order of 10,000 BTC at $5,000, the order book will show a big sell wall that will most likely prevent the price from going above the $5,000 mark. In other words, it would require a strong buying pressure and a significant amount of money to go through the sell wall and breach the $5,000 resistance. The term sell wall refers to a very large limit sell order or a cumulation of sell orders at one price level on an order book.

The lines on the chart are created through the use of plotting dots. Each dot on the depth chart shows how much you can trade at a given point. When you place an order to buy or sell cryptocurrency, it is sent to the order book. An order book is the place where buyers meet sellers by matching opposite orders.

What Is Represented by a Depth Chart

An upgrade to FINVIZ Elite will buy you real-time data, intraday charts and advanced charting tools. For simpler analysis and trend trading, running a chart after market close is often enough to be a useful tool for trades you plan to execute the following day. While stock charts are not the only tool you should use to make trading decisions, they give you more insight than any other tool. There are several places to find quality charts, indicators you should know and additional study you can do. As you review these charting platforms, remember that you can change your strategy at any time, use different charts, adjust your indicators and create a system that works best for you. Some of our favorite stock chart sites include Google Finance, Yahoo Finance, and TradingView, but some stock broker platforms have arguably the best charting tools in the game. Point and figure charts are a separate kind of chart meant to plot price movements of securities.

Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid. Many of the actions you can apply to a chart are also accessible when you right-click on the chart. Comparison charts can also be displayed as a «Percent Change» chart, showing the percent difference between the comparison symbols and the underlying symbol on the chart. Read more about price of bitcoins in usd here. The calculated results are displayed using the bar type you choose for the expression.

The widest part of the candlestick is known as the “real body”, and illustrates the dollar difference between the opening price and the closing price. The thin, upper end of the candle “wick” shows the high price of the time frame, and the thin, lower end of the wick represents the low price. In the chart, we can see the price following a downtrend and finding support. The price tests this support 2 more times, forming the double bottom chart pattern. Actually, in our case, it’s a triple bottom, which works exactly like the double bottom pattern. A significant bounce allows the price to break out of the resistance and reverse the trend. The first take profit target should be of the same height as the distance between the support and resistance. Just like with the double top, the double bottom price target is provided by the distance of the support and resistance zones. Finally, we have the symmetrical triangle pattern, which is a bullish or bearish continuation pattern, depending on the trend it is confirming. If it originates from a bullish trend, a symmetrical triangle will most likely give a buy/long signal.