When looking to invest in any digital currency, it’s likely that someone will advise you to look at the coin’s market charts. These charts, like Bitcoin candlestick charts, provide insight into the movements of a given coin and can help you make a decision about whether to buy or sell. Looking beyond simple analysis and price changes, though, advanced charts can help you understand more about the specific movements of a coin over a day, week, month, or longer period of time. These charts are called Candle Charts, and can be a bit confusing to read at first. However, they are fairly simple once you get the hang of them.
When you want to know how the price of a digital currency has moved over time, look at a price chart.
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Looking at the all-time Coinsquare Bitcoin market chart as an example, you can see the price of Bitcoin in a line graph, with the x-axis being time and y-axis being price.
These graphs are helpful for a snapshot view of what’s been going on with a digital currency so you know if it’s on an up-trend, down-trend, or moving sideways. Depending on your investment thesis and strategy, it could be a good time to buy or sell in any of these conditions.
If you want to know a specific range - for instance, movements in the last week - you can select a date range. Any chart you use, whether Coinsquare’s or not, should give you the opportunity to select a date range to analyze price movements.
For more complex analysis or day trading, you need to know more than the end price for a specific date. While you can zoom in to a one-day or one-week period to get more granular analysis, you may still need more complex information such as the high, low, and price movement during the day. For these kinds of movements, you want to check out a Candle chart. Using the all-time Coinsquare Bitcoin candlestick chart as an example, you can see that each date has much more information on it.
On a given day, the bar is either red or green. If it’s red, then the price of the coin closed lower than it opened for that specific time period (day, week, month, year, etc.). If the bar is green, then it means the price of the coin closed higher than it opened for that specific time period.
The line represents the high and low for the day.
The shaded portion of the bar represents the open and close price of the coin in the given time period. Its colour (see above) indicates if it opened higher or lower than it closed. Similarly to to Price Charts, you can select a date range that makes sense for your analysis.
Investing in digital currencies is a decision that depends on a lot of variables - your personal risk tolerance, the coin you want to invest in, how much you choose to invest, or if you want digital currencies as part of your portfolio at all. Always do your research before investing and don’t take any one piece of advice as the golden ticket. Price analysis, no matter how complex you get, is only one piece of the puzzle.Note: This article is for educational purposes and is not meant to be investment advice. Always do your own research before making any investment decisions.
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