How to Read Crypto Charts (Beginner’s Breakdown)

In this guide, we’ll walk through everything beginners need to know about how to read crypto charts. 

We’ll cover the most common chart types, how to interpret candlesticks, and key patterns and indicators for traders. By the time you finish reading, you’ll be ready to start analyzing crypto charts on your own! 

What are the common types of crypto charts? 

The two most common types of crypto price charts are line charts and candlestick charts. 

What is a line chart? 

A line chart plots a simple line connecting closing prices over time. Line charts make it easy to see price movement over time.

Line charts are great for a quick high-level snapshot – for example, seeing if Bitcoin’s price went up or down last month. 

However, line charts are not ideal for short-term trading because they lack detail. 

What is a candlestick chart? 

A candlestick chart allows you to better understand short-term fluctuations in price. Instead of just a single line, each interval (say, one day or one hour) is shown as a ‘candlestick’ that displays the asset’s opening, highest, lowest, and closing prices for that period​.

Candlestick charts might look more complex, but the extra information can be useful for spotting market trends and patterns.

Which chart should I use? 

In general, if you just want a simple look at prices, a line chart will do. 

If you want to dig into the price action within each period (like how high and low the price swung, and whether it closed higher or lower than it opened), you’ll want to use candlesticks.

Typically, serious crypto traders use candlestick charts because it gives more information about short-term price action. 

How to read a candlestick chart 

A single candlestick shows the open, high, low, and close for a given time period. Each candlestick on the chart represents one period of time (for example, one day on a daily chart, or one hour on an hourly chart).

 The body of the candle (the thick part) shows the range between the opening and closing prices for that period. 

The thin lines above and below the body are the wicks (or shadows) showing the highest and lowest prices reached​ in that period.

What is the green candle?: If the candle is green, it means the price closed higher than it opened. 

What is the red candle? If it’s red, the price closes lower than it opened. 

Example: How do candlesticks work? 

To better understand how candlesticks work, let’s take a look at the example. 

Suppose on a particular day Bitcoin opened at $20,000, then at some point went as high as $22,000, as low as $19,500, and finally closed the day at $21,000. On a candlestick chart, that day would be shown as a green candle (because it closed above the open).

Here’s how it would look. 

The bottom of the candle’s body would sit at $20,000 (the open), and the top of the body at $21,000 (the close). A thin wick would extend above the body up to $22,000 (the high), and another wick would extend below down to $19,500 (the low). 

If the situation were reversed (price opened higher and closed lower), you’d see a red candle with the body spanning from open to close accordingly.

What can we learn from candlesticks? 

Each candle gives a mini story of price action during that interval. 

For example, a tall candle with little to no wicks means the price moved strongly in one direction and stayed there – showing strong momentum. 

Meanwhile, a candle with a very short body and long wicks signals indecision or a tug-of-war between buyers and sellers​.

In one quick glance at a candlestick chart, you can see not only whether the market moved up or down in a given period, but also how volatile it was (via the length of the wicks) and where the market pressure was (toward buying or selling).

Why traders prefer candlestick charts 

Traders favor candlesticks because they pack a ton of information into a compact visual format. With just one candlestick, you can instantly gauge market sentiment for that period – whether buyers or sellers were in control and how intense the battle was​. 

This helps in assessing the balance of power between bulls and bears.

Candlesticks also make it easier to spot specific price patterns that can signal what might come next. There are well-known candlestick patterns (which we’ll cover shortly) that traders use to predict short-term price moves​. 

What are bullish and bearish candlestick patterns? 

Certain arrangements of candles can form patterns that hint at future price movements. Traders have identified dozens of candlestick patterns, but let’s touch on a few well-known bullish and bearish ones:

• Bullish Engulfing Pattern: This is a classic two-candle bullish reversal pattern. The first candle is a small bearish (down) candle, and the next candle is a larger bullish (up) candle that completely engulfs the prior candle’s body​. This shows that buyers overtook sellers, suggesting the downtrend may be reversing.

• Bearish Engulfing Pattern: The opposite of the above – a two-candle pattern where a small up candle is followed by a big down candle that engulfs it. This indicates that sellers have regained control and a downward reversal could be coming soon.

• Hammer and Hanging Man: The hammer is a bullish pattern. It typically appears after a downtrend and indicates that buyers stepped in strongly (hammering out a bottom)​. The hanging man is visually similar (long lower wick, small body) but appears at the top of an uptrend, and can foreshadow a bearish reversal (think of it as the market “hanging” before a drop).

• Doji: A doji is a candle where the open and close are nearly the same. The wicks can be long or short. A doji on its own signifies indecision in the market (neither buyers nor sellers could dominate)​. Dojis often show up in reversal patterns. For example, a doji after a series of down candles could be a sign that buyers are stepping in.
  

These are just a few examples – there are many more candlestick patterns (like morning star, evening star, harami, three white soldiers, etc.). 

The key idea is that by observing the shape and sequence of candlesticks, traders try to predict potential trend changes. For instance, spotting a bullish pattern might suggest it’s a good time to buy, while a bearish pattern could be a cue to take profits. 

Just remember that no pattern is 100% reliable on its own – they work best in conjunction with other indicators or trend analysis.

Why does timeframe matter in chart analysis? 

When reading crypto charts (especially candlesticks), always keep in mind what timeframe you’re looking at. Crypto markets are 24/7 and highly volatile, so a pattern that’s significant on a daily chart might be meaningless noise on a 1-minute chart, and vice versa.

As a general rule, longer timeframes produce more reliable signals – a trend or pattern seen on a weekly or daily chart carries more weight than one on a 5-minute chart​.

That’s because the more data (trading activity) a candle encompasses, the more significant its moves and patterns tend to be.

Can I use short and long timeframe charts together? 

Shorter timeframe charts (like 1-minute, 5-minute, 15-minute) will show you lots of detail and rapid fluctuations. Day traders often use this information to try to time the market. However, these charts can be noisy, with lots of random ups and downs that may not reflect broader trends. 

It’s not uncommon to see conflicting signals between timeframes – for example, the 5-minute chart might show a temporary downtrend (say, a small bearish pattern), even while the daily chart is in a clear uptrend. In such cases, the larger timeframe usually prevails.

Many traders practice multiple timeframe analysis – meaning they check a higher timeframe to determine the main trend, and then zoom into a lower timeframe for fine-tuning their trade.

Bottom line: timeframe matters. A breakout or crossover on a 15-minute chart might only lead to a move that lasts an hour or two, whereas a similar signal on a daily chart could foretell a multi-day rally. Always keep what you’re seeing in context by paying attention to the time frame. 

What is the volume axis on a crypto chart?

On the chart above, notice the price scale along the right side – it’s labeled with actual price levels (e.g., $39,500, $42,000, $44,500, etc.).

Meanwhile, the colored volume bars along the bottom show how many units of Bitcoin were traded in each interval. Volume is often displayed as a separate bar graph beneath the price chart, aligned with each time period​.

How to read volume charts 

If a volume bar is green, it usually means price rose during that period; if it’s red, price fell (matching the candle color).

Understanding the axes is straightforward: if you move left to right, you’re moving forward in time. Volume bars go up and down to show higher or lower trading activity.

Why do volume charts matter? 

Volume tells you how much trading action underpins the price moves you see. Generally, moves on high volume are considered more significant than moves on low volume​.

For example, if Bitcoin’s price jumps 5% in an hour and you see an unusually large green volume bar for that hour, it suggests a lot of buyers piled in – a sign of strong momentum.

On the other hand, if price drifts up on very low volume, it might indicate a lack of enthusiasm or liquidity, meaning the move could easily fizzle out or reverse. 

Also, at key support or resistance levels (more on this in the next section), watching volume can give clues: a breakout above a resistance on huge volume is more likely to be real and sustained than a breakout on thin volume.

In other words, price tells us what happened, volume hints at how significant it was.

What is support and resistance? 

You’ll often hear traders talk about support and resistance levels. These are price levels where the market has a tendency to stop and reverse.

Support and resistance defined 

Support is a price level on the chart where demand (buying power) has historically been strong enough to halt a downtrend and push the price back up. 

Resistance is the opposite – a level where selling pressure tends to overcome buyers and turn the price back down.

In other words, support is like a floor for price, and resistance is like a ceiling. 

Why do support and resistance levels exist? 

These levels often form due to previous price history (e.g., ‘Bitcoin repeatedly bounced near $30,000 – so $30k is a support’) or psychological factors (‘round numbers’ like $50,000 can act as resistance simply because many traders place orders there).

Support and resistance are visible on charts as areas where the price repeatedly stalled or reversed in the past​. 

For example, if Ethereum struggled to break above $2,000 in several instances, $2,000 is a resistance. If it fell to $1,600 multiple times and bounced, $1,600 is a support. 

These levels are useful for planning trades: one might buy near support and sell near resistance, or set stop-loss orders just below a support level (since breaking support might lead to further downside).

Can support and resistance be dynamic? 

Sometimes support/resistance levels line up with trend lines (diagonal support/resistance) or moving averages (dynamic support/resistance). 

Other times, they are static horizontal lines derived from prior price highs or lows. 

How do support and resistance relate to chart patterns? 

Beyond straight lines, there are also classic chart patterns formed by the price trajectory, often bounded by support and resistance lines. 

For instance, a triangle pattern occurs when price range narrows into a cone shape, indicating consolidation before a potential breakout.

A head and shoulders is a reversal pattern that looks (vaguely) like a head with two shoulders – it often signals that an uptrend is ending and turning bearish.

A double top looks like an “M” shape where price hits a high twice and fails to break through, indicating a possible fall ahead; a double bottom (“W” shape) suggests a rise ahead.

While our focus here is not to exhaustively list every pattern, it’s good to be aware of these shapes. They represent the collective psychology of the market – for example, a head-and-shoulders pattern shows a weakening of buying pressure each rally, until sellers take over. 

Support and resistance lines are basically the building blocks of these patterns. If you can spot key support/resistance and draw trend lines, you’ll naturally start recognizing patterns like channels, breakouts (price breaking out of a range or pattern), and so on.

What are trend lines and price channels? 

Trend lines are one of the simplest and most useful tools for chart analysis. A trend line is basically a straight line that you draw across a series of price points to highlight the direction of the market​.

For example, in an uptrend, you can draw a line connecting a series of higher lows (an upward sloping trend line under the price). In a downtrend, you might connect the lower highs (a downward sloping line over the price). 

As long as the price keeps respecting the trend line (bouncing off it in an uptrend, or falling from it in a downtrend), the trend is intact.

Trend lines serve as dynamic support or resistance levels. In an uptrend, a rising trend line below price tends to act as support – traders expect price to bounce when it nears that line. In a downtrend, a falling trend line above price acts as resistance – price often struggles to break above it. When a trend line is decisively broken, it can signal that the trend is weakening or ending.

What is a price channel? 

If you draw a trend line along the highs and another along the lows of a price move, you form a price channel​.

A channel is basically the space between two parallel trend lines – one acting as the upper boundary (resistance) and one as the lower boundary (support). 

For instance, you might notice that Ethereum’s price has been moving in a rising channel: every time it rallies, it tops out around the upper trend line, and when it dips, it finds support near the lower line. Traders will often trade within channels (buy at or near channel support, sell at channel resistance) until a clear breakout occurs.

Why do trend lines and price channels matter? 

Even if you’re not drawing them yourself, it’s good to visualize trend lines and price channels, because many traders are watching them. 

Crypto markets can have self-fulfilling behaviors – if everyone sees price nearing a well-established trend line, many will place trades there (e.g., buyers stepping in at a long-term support trend line), and the anticipated bounce often occurs.

It’s worth noting that trend lines can be drawn on any timeframe. A trend line on the weekly chart might show the macro trend (e.g., Bitcoin steadily up since a certain year), while a trend line on the hourly chart shows the near-term trend. 

What are technical indicators? 

Let’s walk through some technical indicators in crypto charts. 

What is a moving average?

A moving average takes the average price over a specific past period and plots it as a line on the chart. For example, a 50-day simple moving average (SMA) calculates the average closing price of the last 50 days for each point on the line​. 

Moving averages help smooth out price data and filter out short-term “noise”​.

If the market is choppy with lots of ups and downs, the MA line will present a steadier trend line that’s easier to interpret. Traders use moving averages to identify the trend direction (price above the MA suggests an uptrend, below suggests a downtrend) and to spot crossovers. 

What are crossovers? 

A crossover occurs when a shorter-term MA crosses a longer-term MA – for instance, when the 50-day MA crosses above the 200-day MA, you get the famous ‘Golden Cross’ (bullish signal, indicating upward momentum)​. The opposite cross (50-day below the 200-day) is the ‘Death Cross’ (bearish signal). We’ll discuss these in more detail in the next section. 

What are the different types of moving averages? 

Common moving averages in crypto charting include the 50-day and 200-day (for long-term trends), as well as shorter ones like 20-day or 9-day for short-term analysis. Some traders prefer Exponential Moving Averages (EMA), which weigh recent prices more heavily (making them react faster to price changes). 

Why do moving averages matter? 

Regardless of type, moving averages essentially act as dynamic support/resistance and trend indicators. For example, Bitcoin has often found support at its 200-day MA during bull markets – touching that line and bouncing up – whereas falling below the 200-day MA can signal a deeper bearish phase. 

Moving averages can also generate buy/sell signals when they crossover each other or when price crosses them (e.g., price breaking above the 50-day MA might be bullish). Keep in mind, like any indicator, MAs are not foolproof – they sometimes give false signals, especially in sideways, range-bound markets where price is whipsawing around.

What is a Bollinger Band?

Bollinger Bands are a popular indicator that adds a twist to moving averages. They consist of three lines: a middle line which is usually a 20-period moving average, and an upper and lower band which are typically set at two standard deviations above and below that moving average​. 

The effect is a channel or “band” that expands and contracts with market volatility. When price volatility increases, the bands widen; when volatility is low, the bands narrow. 

What’s the point of a Bollinger Band? 

Traders use Bollinger Bands to identify overbought or oversold conditions and to gauge volatility. For instance, if the price touches or moves outside the upper band, the market may be considered overbought (too high relative to recent average) and could be due for a pullback​. If it touches the lower band, it might be oversold – potentially due for a bounce​. 

Often you’ll see price “bounce” between the bands in a ranging market, essentially oscillating around the moving average.

What is a Fibonacci retracement?

Fibonacci retracement levels are horizontal lines that indicate potential support and resistance levels at key percentage intervals.

Unlike the other indicators we looked at, this tool is based on mathematical ratios rather than price averaging. The idea comes from the Fibonacci sequence and the ratio properties within it. 

How do I use a Fibonacci retracement? 

Traders use these levels to anticipate where pullbacks might find support. It’s uncanny how often crypto prices will pull back to a Fibonacci level and then bounce (partially because many traders pay attention to them). 

One caution: not every price move respects Fibonacci levels, and sometimes multiple levels get breached. Like any tool, it’s a guide, not gospel.

What is the golden cross/death cross and why does it matter?

Earlier we touched on the Golden Cross and Death Cross.

The Golden Cross and Death Cross are visual signals of long-term trend shifts: golden cross for bullish, death cross for bearish. Many traders see them as meaningful shifts in the market. 

Golden cross explained 

Golden Cross: The golden cross occurs when a short-term moving average crosses above a long-term moving average. This is interpreted as a bullish omen – essentially that momentum has shifted strongly to the upside and a long-term uptrend may be beginning​.

What’s the logic behind a golden cross: The shorter-term price average is now higher than the longer-term average, meaning recent pricing is stronger than the older pricing, often seen when a downtrend turns into an uptrend. Golden crosses don’t happen very often, so when they do, people pay attention. In Bitcoin’s history, for example, golden crosses have often preceded significant multi-month rallies (though not always immediately – there can be whipsaws).

Death cross explained 

Death Cross: The opposite pattern – the short-term moving average crosses below the long-term moving average. This bearish crossover is called a death cross, suggesting that downside momentum is overtaking the longer-term trend​.
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What’s the logic behind a death cross?: A death cross signals that a period of extended decline or a bear market could be ahead. In crypto, death crosses have been seen before prolonged downtrends or bear markets (for instance, Bitcoin had a death cross in early 2018 before the deep bear market that year).

What should I know about golden/death crosses? 

Do crosses guarantee a big move? 

Not every cross guarantees a big move – there have been “false” golden or death crosses where the moving averages weave back and forth.Typically, the signal is considered more significant if accompanied by strong trading volume and if the crossover holds (the MAs begin to diverge after crossing, rather than quickly crossing back)​

How do I know a cross is real? 

In addition to volume, traders often also look at angle and spacing – e.g., a sharply rising 50-day crossing a flat 200-day might be more meaningful than a barely rising 50-day just inching over a slightly declining 200-day.

Key Indicators: RSI, MACD, and Stochastic Oscillator

Crypto traders often look at separate technical indicator charts plotted usually below the main price chart. These indicators use mathematical formulas on price and volume data to measure things like momentum, trend strength, and potential reversals. 

Relative Strength Index (RSI): The RSI is a momentum oscillator that ranges from 0 to 100, and it measures the speed and change of price movements​. In simpler terms, RSI looks at recent gains vs. losses to determine if an asset is overbought or oversold. An RSI above 70 suggests the asset may be overbought (price has risen too far, too fast and might correct), while an RSI below 30 suggests oversold conditions (price has fallen too far, too fast and might bounce)​.

Moving Average Convergence Divergence (MACD): The MACD (pronounced “mack-dee”) is another momentum/trend indicator that uses exponential moving averages.

In essence, MACD has a main line (the difference between the 12-day and 26-day EMA) and a signal line (a 9-day EMA of the main line). It’s usually displayed as a histogram or two lines that oscillate around zero. When the MACD line crosses above the signal line, it’s considered a bullish signal (momentum turning up); when it crosses below, that’s bearish. Also, when MACD is above zero, the short-term average is higher than the long-term average, which generally confirms an uptrend (and vice versa for below zero).

Traders use MACD for identifying trend changes or momentum shifts. For example, if a cryptocurrency has been in a downtrend and you see the MACD line make a bullish cross from below zero to above zero, it suggests the downward momentum is waning and an uptrend might be starting. 

What platforms should I use for crypto charting? 

While crypto exchanges do offer charting tools, getting started with a tool like TradingView is recommended for most traders. 

• Cryptocurrency Exchanges: Most major exchanges like Coinbase, Binance, Kraken, etc., provide built-in charting tools on their trading interfaces. If you have an account, you can typically pull up candlestick charts for any listed coin, adjust the timeframe, and even overlay basic indicators. For example, Coinbase’s advanced trading view has candlestick charts with indicators and drawing tools.
  
  
• TradingView: TradingView is the most popular tool for all kinds of chart analysis, including crypto. TradingView offers free interactive charts for Bitcoin and thousands of altcoins, with a wide array of technical indicators and drawing tools at your disposal​.

What are the limitations of crypto charting analysis? 

Before we wrap up, it’s important to address the limitations of relying on chart analysis (technical analysis) in the crypto market. Remember, chart analysis is not a crystal ball. 

• False Signals Happen: Technical indicators and patterns sometimes give false positives. For example, a chart might appear to break out above a resistance (a bullish signal) only to fall right back down – a fake-out. In crypto’s volatile environment, these false signals can be common​.
  
  
• Technical Analysis Ignores Fundamentals/News: Charts don’t account for real-world events like regulatory news, hacks, macroeconomic shifts, tweets from influential figures, etc. Crypto is particularly sensitive to news (think of how a single Elon Musk tweet can move Bitcoin or Dogecoin prices!). A  head-and-shoulders pattern can be rendered irrelevant if, say, a major country suddenly announces crypto adoption.
  
  
• Subject aspects: Drawing trend lines or identifying patterns can sometimes be subjective – two analysts might draw different lines or see different patterns on the same chart. It’s an art as much as a science. Don’t be surprised if you occasionally interpret a chart differently than someone else. The key is to remain consistent in your own approach and test what works for you over time.
  
  
• Over-Reliance and Optimization Bias: It’s possible to go overboard and see patterns everywhere or over-optimize your indicators for past data. An indicator might perfectly explain the last 6 months of price action, only for it to not work at all the next 6 months. Remember, markets evolve.
  
  

Given these limitations, many traders adopt a blended approach: use charts to plan trades and identify opportunities, but also consider fundamentals and manage risk on every trade. It’s also wise to use multiple technical tools rather than betting on a single signal.

Remember, no method of analysis is right 100% of the time. Technical analysis is a game of probabilities. Even expert traders still encounter losing trades or “wrong” predictions – and that’s normal. The goal is that over a series of many trades, your correct calls (and how much you profit from them) outweigh the bad calls (and how much you lose on those). 

In conclusion 

Use your new chart-reading skills wisely: as a way to inform your trading/investing decisions, not as an end-all. Always combine chart analysis with sound judgment and risk management.