Why Should You Learn to Read Crypto Candle Charts?

Cryptocurrency has come a long way since 1990, when the first cryptocurrency eCash was invented. Although eCash went nowhere, the second attempt at crypto in 2009 started with Bitcoin and has since grown. You want to learn to read candle charts because candlesticks are useful when trading crypto since they show four important price points. 

What Are OHLC Candle Charts?

  • Short for Open-High-Low-Close charts

  • Used as a trading tool to visualize price changes for securities, currencies, stocks, bonds, commodities, etc.

  • Help interpret the day-to-day sentiment of the market and forecast 

  • The x-axis is the timescale

  • The y-axis shows the price scale

  • Wicks occur when the prices changes a lot over the period the candle represents

Determine the Time Frame

  • Look at the x-axis to see the time frame being displayed

  • This will show how far back the chart goes

Identify the Candle Pattern

  • Use the color to identify if the cryptocurrency has gone up or down

  • Green represents price increases

  • Red or black represents a price decrease

Understand the Candle Pattern

  • If the candle has a long wick at the top and short wick at the bottom, it means the price rose and fell back down

  • When the candle has a long wick at the bottom and a short wick at the top, the price fell but then recovered

Determine the Trend

  • Look at the overall pattern of the candles

  • Green candles with long wicks shows that the price is trending upward

  • A series of red candles with long wicks suggests that the price is trending downwards

Look for Support and Resistance Levels

  • These are the levels that shows that the cryptocurrency has struggled to break through

  • Look at the areas on the chart where the price has bounced off a certain level 


It is important to understand how to read crypto candlestick charts if you are looking to buy and sell cryptocurrency. Remember that practice makes perfect. We would love to help you invest with confidence, so make sure you subscribe to stay on top of our latest educational guides. 






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