In your quest to understand where price is going it’s up to you to decide the time frame within which you want to operate, remembering the distinction between Trading – short term decision – and Investing – long term positions.
Charts enable you to zoom out and look at the broadest possible time scale, or zoom in and focus on price change on a short term basis, aiding Technical Analysis.
Within your chosen time-frame the bitcoin price charts tell a story of how the price has moved – its volatility – to provide a plot for your chosen scale.
But to get a more detailed view of the price movement you need, chart that includes what’s known as Candlesticks (often abbreviate to just Candles) because that is what its shape resembles. With four key elements, the top and bottom of the candle body and a wick above and below.
Through these four elements candles flesh out a simple line plot providing much more detailed information about what happened to price within a given chunk of time, rather than the single plot.
For example, bitcoin’s price may have averaged $37,000 on a given day, but this doesn’t tell you anything about volatility. How high did it go, how low, and was the price higher than the previous day or lower? All these are crucial for trading..
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