Entering the world of cryptocurrency can be overwhelming for beginners. One of the most common challenges is understanding how to check prices and analyze market movements. Knowing how to read charts is essential because it allows you to observe current trends, identify patterns, and develop your own trading strategies.
This guide breaks down the process of analyzing cryptocurrency charts into three simple steps: selecting the right charting tools, understanding the basics of reading charts, and applying advanced techniques.
Why Learning to Read Charts Matters
Whether you want to know the current price of Bitcoin, review historical price movements, or decide when to buy or sell, knowing how to read charts is a fundamental skill. Relying on others for price updates or trading tips can be risky. Those sources may not always be accurate—or may even have ulterior motives.
By analyzing the markets yourself, you take control of your investments. Plus, many platforms offer free charting tools, making it easier than ever to stay informed.
Step 1: Choosing the Right Charting Software
There are three main types of cryptocurrency charting tools:
- Dedicated crypto data platforms like CoinMarketCap.
- Built-in exchange charts like those on Binance.
- Multi-asset platforms like TradingView.
| Platform | CoinMarketCap | Binance | TradingView |
|---|---|---|---|
| Free? | Yes | Yes | Free with paid upgrades |
| Pros | Multi-exchange data | Direct trading interface | Compares crypto with stocks |
| Cons | Can be overwhelming | Limited to one exchange | Market data may be segmented |
CoinMarketCap
CoinMarketCap aggregates data from various exchanges, providing a broad view of prices, trading volumes, and market trends. It’s useful for comparing exchanges and spotting overall market movements. If an exchange isn’t listed here, it might be worth avoiding.
Binance App
Binance and other major exchanges include built-in charting tools. These are convenient if you prefer to analyze and trade in one place. The charts display real-time prices, historical data, and basic indicators.
TradingView
TradingView supports both cryptocurrency and traditional financial markets. It’s ideal for comparing crypto trends with stocks, commodities, or indices. The free version is robust, but advanced features require a subscription.
Many traders use a combination of these tools. For this guide, we’ll focus on exchange-based charts.
Step 2: Basic Chart Reading Techniques
When you open a chart, the first step is selecting a trading pair, such as BTC/USDT (Bitcoin vs. Tether). This shows the price of one asset relative to the other.
The large number displayed is the latest price. For example, if BTC/USDT shows 85,824.35, that means one Bitcoin is worth 85,824.35 USDT.
Next to the price, you’ll often see data like the day’s high, low, and trading volume. Volume can indicate market activity—higher volume often means more interest.
Below the price, you can switch between different timeframes: minutes, hours, days, or weeks. A “daily” chart shows each candle representing one day’s price movement. Hovering over a candle reveals the open, high, low, and close prices for that period.
Candlesticks are green when the price closes higher than it opened and red when it closes lower. Understanding candlestick patterns is key to interpreting market sentiment.
Step 3: Advanced Chart Analysis
Basic price charts don’t always show whether an asset is overbought or oversold. Technical indicators can help by processing price data into actionable signals.
Common indicators include:
- Moving Averages (MA): Smooths price data to identify trends.
- MACD: Measures momentum and trend changes.
- RSI: Identifies overbought or oversold conditions.
- KDJ: A momentum oscillator useful for short-term signals.
- Bias Ratio: Highlights deviations from average prices.
- Williams %R: Another oscillator for entry and exit timing.
No indicator is 100% accurate—they’re tools for informed decisions, not guarantees. Always use risk management strategies, like setting stop-loss orders, to protect your investments.
To access these indicators on most platforms, click the “Technical Indicators” icon, choose your preferred tool, and adjust parameters as needed.
👉 Explore advanced charting tools
Important Considerations
Cryptocurrency markets are highly volatile. Prices can surge or crash unexpectedly, even when indicators suggest otherwise. Use chart analysis as part of a broader strategy that includes fundamental research and risk management.
Frequently Asked Questions
What is the best free charting platform for beginners?
Many beginners start with exchange-built charts (like Binance or Coinbase) because they’re simple and integrated with trading. CoinMarketCap and TradingView are also excellent free options.
How often should I check cryptocurrency charts?
It depends on your trading style. Long-term investors may check weekly or monthly, while day traders monitor charts constantly. If you’re not active, consider using limit orders or dollar-cost averaging to automate trades.
Can technical indicators predict price movements?
Indicators provide insights based on historical data, but they can’t guarantee future results. Always combine technical analysis with market news and personal research.
What is a trading pair?
A trading pair like BTC/USDT shows how much one cryptocurrency is worth in terms of another. The first asset is the one you’re pricing, and the second is the currency used for valuation.
How do I avoid common mistakes when reading charts?
Avoid emotional decisions, don’t rely on a single indicator, and never invest more than you can afford to lose. Backtest strategies on historical data before applying them.
Are there mobile apps for chart analysis?
Yes, most exchanges and data platforms offer mobile apps with full charting functionality. These are great for monitoring markets on the go.
Remember, chart analysis is a skill that improves with practice. Start with the basics, experiment with indicators, and always prioritize education and risk management.