Cryptocurrency is soaring high and reaching new heights. This is the reason why people are interested in trading Cryptocurrency. According to an observation, more than 46 million traders trade in Cryptocurrency in the USA. They love their Bitcoins and Ethereum.
Do you want to trade on Cryptocurrency? You can do it safely; you can do it using the profit Bitcoin app. You can visit the website, the-profit-bitcoin.com, to know more about this. But the first thing that you need is to analyze Cryptos. There are a few important Crypto charts that you need to know about. Let us know about them in detail.
What Is A Crypto Chart?
Before discussing the major Crypto charts, you first need to know what Crypto charts are. A Crypto chart is a graphical representation of data. These charts are used to track the price movement of the cryptos. At the same time, it can be used to track the trading opportunities you have with Cryptocurrencies.
When you are trading on Cryptocurrencies, you need to understand these patterns. This can help you understand the Cryptocurrency trends. You can trade judiciously with Cryptocurrency and minimize your risks. Do not blindly believe in hired experts.
The Three Chart Pattern Trader Needs To Know
Crypto traders and enthusiasts need to have an idea of the Crypto charts. With the help of the charts, you can understand the different trends. Among the Crypto charts, there are some of the most common ones that you could know, and they include:
- Head and Shoulders.
- Double Top.
- Double Bottom.
- Wedges.
- Cup and Handles.
- Pennants.
- Triangles.
In this section, we are discussing the three most common chart patterns that Crypto traders can follow.
1. Head And Shoulders
The Head and Shoulder pattern is one of the most reliable reversal chart patterns. This pattern is formed when the price of the Cryptocurrency rises to a certain level and then falls down to the same level (from the point of rising). Thereafter the lines will form a rise and a fall. This will repeat the third time.
Here, the first peak and the third peak will be smaller compared to the second peak. Therefore, the complete opposite picture can be referred to as the reverse Head and Shoulders.
2. The Double Top Pattern
The double-top pattern is one of the most important patterns with Cryptocurrency. This pattern is a bearish reversal pattern. The pattern gets formed when the assets reach new heights. Then they pull back again but fail to reach the height that they achieved.
The double-top pattern is formed when the price falls below the support levels. The levels are typically referred to as the neckline. Now, if the neckline is broken, the traders use technical tools to analyze and determine where the price will head next.
The double-top pattern is quite similar to that of the Head and shoulder pattern. The difference between the two is that one has two heads, and the other has three heads.
3. Wedges
Wedges are the bullish as well as the bearish reversal patterns. Here two trend lines converge. There are two types of wedges, the rising wedge, and the falling wedge. The pattern of the rising wedge signals the fact the price of the assets will go on decreasing for a longer period.
A falling wedge is just the opposite of a rising wedge. Here the levels are the downward sloping levels. It defines that asset prices will continue to rise. They will rise and break through the resistance. Because these are all reversal patterns, you have to think just the opposite of what is displayed.
Closing The Discussion
Cryptocurrency is a great way to invest. You have a good opportunity to grow with them. But at the same time, you need to know that investments are subject to market risks. When an individual trades on Cryptocurrencies, they need to be judicious.
One must not trade blindly; after all, they invest their hard-earned money. They need to know things in detail in which they invest. From this aspect, knowing how to read the chart patterns is important.
