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How Do You Read Bitcoin Price Charts?

How Do You Read Bitcoin Price Charts?

Bitcoin price charts may appear different on different sites, but they are generally not much different from technical charts used in other markets.  

Charts are tools used to reduce vast amounts of data into characteristic parts, in an attempt to illustrate the trajectory, velocity, or potential future of an asset’s price. A single chart may show you 20 different kinds of descriptive data in one picture, by overlaying certain measurements, rates of change, or comparative data directly on top of a chart or in a windowed fashion around it.  Many online charts will give you the ability to pick and choose what kinds of data you see and how it is displayed. Once you have played around with it for a few minutes and looked up some information about the different tools available for analysis, you may be able to understand some things about bitcoin that may help you get closer to making trading decisions. That’s the beauty of charts, really, in that, they are intended to be somewhat intuitive.

Do not be misguided into thinking you will easily become an expert at technical analysis in a day or even a month, however. Volumes have been written on the subject, and many more volumes could be filled with the cautionary tales of those who did not bother to read the instructional volumes. Tickeron’s Artificial Intelligence can make this entire process easier for you.  

Usually, bitcoin prices are charted based on their exchange rate with the dollar, and there will be an x-axis that represents time, a y-axis demarcating units of value with data plotted in the area above and to the right of these. Just because the price appears to be climbing at the moment does not mean that you’re guaranteed a profit if you buy some bitcoin that day.  You may want to “zoom out” for a longer time frame, or add-in a line for a longer-span moving average to see if the trend you’re seeing is likely to sustain itself or to be corrected by sell-offs. Again, Tickeron’s Artificial Intelligence is designed to do much of this work for you.

Bitcoin, despite the size of its market cap, is still extremely volatile. You can look for trend lines, and channel lines, and support and resistance lines based on the Fibonacci sequence, and these may all help, but at the end of the day, you should only be trading amounts that you could live without, and base your decisions on what makes sense to you.

Keywords: technical analysis, charting, exchange rates, Bitcoin price volatility, price trends,