How to Read Crypto Charts: A Practical Guide

Technical analysis helps traders make informed decisions based on price action and market patterns. Here's what you need to know.

Understanding Candlesticks

Each candlestick shows four data points: Open, High, Low, Close (OHLC).

• Green/White candle: Price closed higher than it opened (bullish)
• Red/Black candle: Price closed lower than it opened (bearish)
• Wicks/Shadows: Show the high and low prices during that period

Key Support and Resistance

Support is a price level where buying pressure tends to overcome selling. Resistance is where selling pressure dominates. These levels often become self-fulfilling as many traders watch the same prices.

Essential Indicators

Moving Averages

The 20-day and 50-day moving averages help identify trends. Price above the MAs suggests bullish momentum; below suggests bearish.

Volume

Volume confirms price movements. Rising prices with increasing volume is more reliable than rising prices with declining volume.

RSI (Relative Strength Index)

RSI measures momentum on a 0-100 scale. Above 70 suggests overbought conditions; below 30 suggests oversold.

Chart Timeframes

For meme coins:

• 1-minute to 15-minute: Day trading, very short-term scalps
• 1-hour to 4-hour: Swing trading, multi-day holds
• Daily: Trend identification, longer-term analysis

Always use multiple timeframes to get the full picture before making trading decisions.