Similar to technical charts used by traders in the stock market, crypto-charts help investors pick which cryptocurrencies might be good investments.

Crypto charts represent a visual history of changes in price and volume. The visualisation method can be used to identify investment opportunities based on the past movements of digital currency prices

Cryptocurrency charts illustrate a given currency’s trading pair, period (day/week/month), and exchange. Each chart typically shows open, high, low and close prices for each timeframe—as well as dates and price increments at the bottom of the screen or on its side.

Cryptocurrencies are traded 24/7, and a chart can be an effective way to visualise that activity. However, since charts might seem complicated at first glance, it's important to understand their basic concepts—such as price movement over time

The Japanese Candlestick chart.

A Japanese candlestick is one of the most frequently used charts in the cryptocurrency market. The graphic shows a reduction or increase in the asset’s price over a given period of time. In addition, traders use Japanese candlestick charts to identify existing trends.

When a candle is red, it means that the closing price was lower than the starting price. This indicates a downward trend during this period of time.

A green candle indicates that the closing price was greater than the starting price; this implies that an asset rose in value.

Candlestick charts can represent various market dynamics. Depending on the shape, color and size of a particular candlestick pattern, traders will either take positions or adjust their strategies accordingly.

Bullish Engulfing Candle Pattern

A bullish engulfing candle occurs when a green candle completely engulfs the red body of the previous one. The pattern signals to traders that sellers were exhausted and buyers quickly jumped in, pushing prices sharply higher.

Morning Star Candle Pattern

When a Doji appears at the bottom of an upward move and is followed by strong gains, that’s known as a morning star pattern.

A Doji candle has little or no body and few wicks. Its formation shows that sellers had a powerful downward surge followed by hesitation before the trend finally reversed.

Bearish Engulfing Candle Pattern

A bearish engulfing candle occurs when a red body completely surrounds the previous green bullish candle. These can be highly significant reversal signs—for example, this was one of the signals that bitcoin used to signal its three-year bear market.

Evening Star Candle Pattern

An evening star pattern appears when a stock's price is rising and consists of a Doji followed by an abrupt drop.

Bullish and Bearish Patterns

Bullish reversal patterns and bearish reversal patterns are two kinds of chart patterns that signal reversals in the prevailing trend. For example, a Hammer Candle Pattern—a bullish pattern signalling that a stock is nearing the bottom of its downtrend—is one kind When the body of a candle is small and its wick long, that indicates that sellers have driven prices down during a trading session. In response, buyers will tend to step in at the end of this session—thus closing prices on an upswing. An upward trend should be validated by being sustained over several days and accompanied by an increase in trading volume.

Shooting Star Candle Pattern

A shooting star candle pattern is a bearish reversal that occurs at the height of an uptrend before reversing down.A shooting star candle pattern indicates a temporary period of falling prices by drive-by buyers, which are met with resistance.

Head and Shoulders

Head and shoulders patterns are reversal signals that may form at either the peak or bottom of an ongoing trend. If such a pattern forms near the bottom of a trend, it's known as an inverted head-and-shoulders formation. These patterns represent a fight between buyers and sellers, with one side eventually coming out on top—resulting in an even greater reaction from the other side of the market.

Wedges

The wedge pattern is a common occurrence in financial markets. It appears when the trend of stocks, currencies and/or commodities begins to settle down after trending for an extended period of time—and finally results in a breakout from this range-bound price action.

Support and Resistance

It’s crucial to understand support and resistance levels when reading a crypto chart. Support refers to the price at which an asset cannot fall below for a certain period of time

The term resistance level refers to the price at which an asset is not expected to rise any higher.

This is the level at which sellers outnumber buyers in a market for digital assets. Experienced traders use support and resistance levels to help them assess whether or not it's a good time to buy or sell.