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What Is a Crypto Market Chart and How to Read It?

A price chart is a visual representation of a currency pair’s price over a certain period of time. On a cryptocurrency price chart, you can observe and identify price movements, patterns, and possible trends to establish your trading strategy.

There are the three commonly used price charts — candlestick charts, line charts, and bar charts. All three chart types have the price on the vertical axis and the time on the horizontal axis. Same data is used to create these charts but the way that the data is interpreted and presented are different.

In CEX.IO Trade page, the only available chart option is the candlestick charts, but at CEX.IO Broker, all 3 price chart types are available.

Candlestick Charts

Candlestick charts are the most widely used price charts in trading. In these charts, each candle represents a duration of time depending on the timeframe (hourly, daily, weekly, etc). So if you are looking at a daily chart, each candlestick represents a single day in time.

Candlesticks help visualize bullish or bearish sentiment by displaying “candle bodies” with two different colors. If a candle represents an increase in price, then it has a green colour and if it represents a decrease in price, it has a red colour. Change in price during the lifespan of a candlestick is calculated by subtracting the price of the last trade from that of the first trade.

Japanese candlesticks are the most commonly used type of candlesticks in the trading world.

Each candlestick in a price chart contains the following information:

  • Opening price, which is located on the left bottom corner of the candle’s body if it is a green, increasing candle, and on the top left corner of the candle body if it is a red, decreasing candle.
  • Closing price, which is located on the top right corner of the candle’s body if it is a green, increasing candle and the right bottom corner of the candle body if it is a red, decreasing candle.
  • High price, which shows the highest traded price during the lifespan of that price candle. If the closing price of the candlestick is lower than the high price, the high price is represented as a “wick” that spikes above the body of the candle.
  • Low price, which shows the lowest traded price during the lifespan of that price candle. If the closing price of the candlestick is higher than the low price, then the low price is represented as a “wick” that spikes down from the bottom of the candle body.

Tip:
Wicks can either suggest strong selling pressure (if it is a wick to the top) or buying pressure (if it is a wick from the bottom). In that regard, wicks could serve as an indicator to identify potential trend reversals.

Line Charts

Line charts are a simpler display of price action compared to candlestick charts.

You are able to view line charts in the CEX.IO Broker page. You need to find the chart type dropdown menu on top of the price chart, which is located next to the time period selection dropdown menu.

Line charts display only the closing price of a currency pair for each time point on the chart. It provides a more simplified, clear view of the price action eliminating all the noises and extreme prices that happen per unit of time in the chart.

Bar Charts

A bar chart is a collection of price bars, with each bar showing price movements for a given duration of time. Bar charts consist of vertical price bars which display the open, high, low, and closing price of an asset. Just like with candlestick charts, each vertical bar constitutes a single unit of time in the chart depending on the timeframe used (hourly, daily, weekly etc).

You are able to view bar charts in the CEX.IO Broker platform. You need to find the chart type dropdown menu on top of the price chart, which is located next to the time period selection dropdown menu.

The top point of a vertical bar represents the high price and its bottom end represents the low price.

The horizontal, small line that sticks out from the left side of the vertical bar represents the opening price, while the horizontal line that sticks out to the right side represents the closing price of the bar.

Bar charts are colour-coded like candlestick charts. If the left, horizontal bar (opening price) is located below the right horizontal bar (closing price), it means price has increased so the colour of the bar is green.

Similarly, if the left horizontal bar (opening price) is located above the right horizontal bar (closing price), it means price has decreased so the colour of the bar is red.

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