#CryptoCharts101
Reading crypto charts is essential for trading decisions. Here’s a beginner-to-intermediate guide to understanding crypto charts effectively:
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📊 1. Understand the Basics of a Price Chart
➤ Candlestick Chart (most common)
Each candlestick shows price movement over a time frame (e.g., 1h, 4h, 1d).
Open: Price at the beginning of the time period.
Close: Price at the end.
High: Highest price reached.
Low: Lowest price.
✅ If the candle is green: close > open (bullish)
❌ If the candle is red: close < open (bearish)
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🧭 2. Time Frames
1-minute to 15-minute: Scalping/intraday.
1h to 4h: Swing trading.
1d to 1w: Long-term/position trading.
⚠️ Patterns behave differently depending on the time frame.
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📈 3. Support & Resistance
Support: A price level where buying interest is strong (acts as a "floor").
Resistance: A level where selling interest is strong (acts as a "ceiling").
🧠 Tip: Price often bounces off support and gets rejected at resistance.
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🧩 4. Chart Patterns
These help predict future movements:
Pattern Type Implication
Head & Shoulders Bearish Reversal downward
Double Top Bearish Reversal downward
Double Bottom Bullish Reversal upward
Cup and Handle Bullish Continuation upward
Flag/Pennant Both Continuation pattern
Ascending Triangle Bullish Breakout expected
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📊 5. Volume
Measures trading activity.
High volume on a breakout = more reliable.
Low volume = false breakout risk.
🔍 Always compare volume spikes with price action.
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🛠️ 6. Indicators & Tools
Indicator Use
RSI (Relative Strength Index) Overbought >70 / Oversold <30
MACD (Moving Avg. Convergence Divergence) Momentum & trend shifts
Moving Averages (MA/EMA) Trend direction & support/resistance
Bollinger Bands Volatility & mean reversion
Fibonacci Retracement Possible pullback/support levels
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🧠 7. Trends
Uptrend: Higher highs & higher lows.
Downtrend: Lower highs & lower lows.
Sideways: Range-bound, no clear direction.
📏 Use trendlines to draw the direction visually.
