When it is your first time stepping into the Bitcoin (BTC) trading arena, one of your top priorities is to understand the technical analysis. Learning how to read cryptocurrency charts is one of the critical skills in trading Bitcoin.

At first, the charts might look confusing and intimidating for beginners, from colors to shapes and lines. Understanding and technical learning analysis also mean that you need to learn the jargon in trading.

No matter how confusing the crypto charts are at first glance, the good news is that Bitcoin trading is very much similar to stocks. The only difference is the asset. You just need to give yourself enough time to understand technical analysis and you are ready to start your journey to successful crypto trading.

Analyzing the Bitcoin market

You need to focus on the price of Bitcoin in technical market analysis. This requires you to use technical indicators while ignoring any external variables that contribute to the price. This is according to the Dow Theory, which is a strategy that provides three market movements insight.

• Main Movement

This market movement refers to the major trend that will encompass the years of market activity. Depending on the timeframe, it can be either bullish or bearish.

• Medium Swing

This secondary market reaction lasts for up to three months and includes market retraces. It occurs when the market movements of BTC starts to return to its original state.

• Short Swing

This refers to the daily price fluctuations and can last up to 30 days, depending on the scenario. It occurs because of market speculation, and BTC experiences it on a regular basis throughout the week.

Understanding Technical Analysis

In predicting the price of BTC, you need to use a combination of tools. Meanwhile, if you want to have an awesome trading experience, you can visit BitBolt.

Below is a list of key concepts to simple things in understanding the technical analysis:

• Chart Timeframes

The timeframes on BTC exchanges include 15 Min, Hourly, 4-Hour Chart, and Daily Chart. Mind that the timeframe you will use will depend on your trading style.

• Day Trading

If you are a day trader, you can open and close the trading positions in a matter of minutes. You can also trade continuously throughout the day.

• Long-Term Trading

In long-term trading, you focus on holding a position for either months or years. Some traders prefer selling their Bitcoin holdings.

• Market Capitulation

This refers to the total amounts of coins multiplied by the current price of each coin. Examining the market cap will help you gain deeper insights into how stable the asset is.

• Candlestick Charts

These charts are the most popular chart style used in the cryptocurrency space. Each candle will show you the Bitcoin’s price movement over the selected timeframe.

• Relative Strength Index (RSI)

The traders utilize this mathematical formula in measuring the current of the market. It takes both the speed and strength of the price movements of the market and then compares them to others which occurred previously.

• Support and Resistance Lines

The support and resistance lines can act as invisible barriers that provide predetermined price levels of Bitcoin at which the trend reversal occurs. If you notice that the support level is broken, then it simply means that the market comes with the reversed flow.

Conclusion

Always keep in mind that crypto trading is all about understanding the market’s psychology meaning, no need for you to reinvent the wheel. Do not rush for something. You can be a successful trader by showing a high level of patience. As a beginner, you still have to understand the technical skills before you proceed to advanced skills.