A few years ago a new investment avenue gained immense popularity known as cryptocurrency, it is a digital payment system, wherein crypto is a collection of binary data which is designed to act as a medium of exchange. There is no involvement of the bank, it is a peer-to-peer transaction, investor buys cryptocurrencies in the form of coins, records of which are stored in a digital ledger and backed by strong cryptography to secure transaction records. These cannot be converted into commodities neither they exist in physical form (like paper money).
Therefore when the cryptocurrency price movements are speculated via a contract for difference trading (CFD) account or buying and selling underlying coins via an exchange, it is called crypto trading.
For instance, CFD trading is a type of derivative through which one can place bets on Bitcoin price changes without possessing the underlying currencies.
Earlier, the general public hesitated in investing in Cryptocurrencies, but looking at its exponential growth in such a small time, it gathered the attention of all kinds of investors (low, medium, and high net worth) and now we read about it daily in business sections as well as the front page of newspapers and financial publications.
In the year 2010, the prices of Bitcoin and Ethereum touched the sky and made investors billionaires in no time. A large number of retailers and online business owners are beginning to accept bitcoin as a method of payment.
It has a global presence but is still decentralized, all the jurisdictions around the globe are planning to legalize it and develop certain regulations for proper trading and make it easier for companies to carry out initial coin offerings (ICO).
Some of the popular cryptocurrencies exchanges are:
Coin Gabbar, India’s first Cryptocurrencies Marketplace.
Coin Base, as it is easy to understand well as a beginner.
Binance US, low fee charged and is the largest crypto exchange in the world.
Block fi, gives better interest rates.
Crypto.com, Secured transactions.
Bisq, best-decentralized exchange.
Cryptocurrency technical analysis is conducted using mathematical indicators on previous prices so as to predict future trends, basically, the idea is to understand the market behavior and analyze trends such that we buy at a lower price and sell at a higher price to earn a reasonable profit.
It should be noted that no technical analysis can give 100% true predictions.
Below is mentioned 10 important things one must know about cryptocurrencies live chart:
In a cryptocurrency chart, to get the precise detail a trader must consider a candlestick chart pattern as it displays four different prices at each interval:
This pattern is in the form of a bar and two wicks, wherein the top wick represents the high price and the bottom wick shows the low price.
It appears in red and green color, red depicts the price that ended that day at a lower price than it started that day.
And green depicts the price ending higher than it started that day.
Studying each candlestick in detail helps investors are predicting further trends and can invest accordingly.
2. How to Determine Support and Resistance Level
There is a point where the prices are repeatedly pulled back, this is known as a resistance level and where the prices are bottomed out it is known as support, once the support and resistance levels are defined, investors can develop strategies like s/he can put stop loss at the support level and selling price should be defined at or higher than resistance level.
3. Relative Strength Index
It’s a line that oscillates between 0-100 and is neutral, a higher value is considered an overbought condition, and a lower value is considered oversold condition.
4. Moving Averages
Moving averages help in determining the direction of a trend, a moving average sums all the data points of a cryptocurrency over a set period of time and divides the total with a set number of data points to evaluate an average. It is moving because the prices are constantly changing using updated price data.
5. Average Directional Index
This helps in determining the strength of a trend, if the line is rising it indicates the current trend is growing stronger.
6. Cup and Handle Pattern
This is a bullish setup wherein a cup and a handle can be drawn. This can happen when prices fall and rise to the same level as they fell and then have a steep but brief drop. The final drop creates a handle, at which point the pattern gets complete and prices could rise further.
An inverse of it shows a bearish trend.
7. Trend Lines
For cryptocurrency chart analysis trend lines are formed, these trend lines are single lines connecting multiple low and high price points.
In cryptocurrency, short-term momentum strategies tend to give positive returns. So far seen cryptocurrencies have given higher risk-adjusted returns and lower downside risk than a passive investment.
Volume is the sum total of actual trades taking place in the market, the higher the volume of cryptocurrency transactions, the more liquid the crypto market will be.
10. Fundamental Value
It is still unclear whether cryptocurrencies have fundamental value.
Crypto transactions have gained good momentum in India as well, their demand is already rising and it is emerging as a strong asset class after the RBI ban on crypto transactions was ruled out by the supreme court in 2020. Now, not only crypto-enthusiast are trading, but also institutional investors are showing interest and hence increasing demand in India.
But the exchanges do not have the data for all the Crypto Assets. Also, there is no detailed research provided about the coins/tokens to be traded in the form of research and analysis. Coin Gabbar is a unique platform that provides a detailed analysis of Crypto Assets and their price movements.
These are the important things to know about cryptocurrency live charts. Now that you understand the working of crypto charts, let’s get you started with crypto trading. All the best!