Cryptocurrencies are taking the world via a whirlwind. The oldest and most popular one is the Bitcoin. Moreover, it’s highest ever market value almost touched $20,000 in late 2017. Other players such as Ethereum, TRON, Ripple, Litecoin, etc. have also gained a considerable market share and present investors with an opportunity to trade and earn with this emerging technology.
Common mistake rookie traders make is trading with intuition, without knowing how to use crypto charts. They buy when everyone is buying, the demand surges while the supply remains stagnant and, hence, the price goes up. Later, they sell when everyone else is selling, leading to over-supply and bringing down the price. This exercise makes an investor buy at a high price and sell at a lower price, and they lose a lot of money in the process.
Markets are essentially about timing. You might have the right idea, intuition, or even knowledge about some fundamental analysis by reading crypto charts to back a decision of purchasing a cryptocurrency. But if it’s at the wrong time, you are destined to lose money. At the same time, you need to be prudent about when you exit the market. Otherwise, you lose money, which otherwise you could earn with just a bit of patience.
A major risk in investing in cryptocurrency is its volatility. However, risks also present us with opportunities, such as making substantial short-term gains. Bitcoin traded anywhere between $5000 and $12000 from August’19 to July’20, and it grew about 2,000% in the year 2017 alone when it touched its all-time peak.
There are a lot of cryptocurrency charts with indicators available freely on the internet. However, the task is to understand how to read them. For better clarity, we will limit the scope of this article to Bitcoin for fundamental analysis and present some basic techniques on reading Bitcoin charts.