Cryptocurrency traders who are interested in technical analysis will likely be attracted to the ability to use charts when they are trading Bitcoin. This is a great way to analyse price movements to decide when to buy or sell Bitcoin at the optimal price. Using Bitcoin live charts is one way to get an objective measure of how the crypto’s price is moving, without having to rely on intuition.
Plus500 offers many types of charts, including the three most popular: Line charts, Bar charts and Candlestick charts - all of which can be used when trading Bitcoin. Each one offers different advantages and you need to determine which type of chart is preferable for your own personal trading strategy.
The line chart is the most basic chart style on the Plus500 platform. It plots the closing price of Bitcoin for a specific time period that the trader chooses. The line chart is a visual representation of what happens to Bitcoin’s price during the trading day, and only shows the closing price data, so pricing information from less critical times of the day is filtered out. You simply see where the price was on the day/s before, and then compare it to where the price is now. This can potentially make it easier to spot trends.
For example, take support and resistance trendlines. A support line is the level where a downtrend can be expected to pause due to increased demand, while a resistance line is the level where an uptrend has a good chance of stopping due to increased supply. When the value of Bitcoin hits a support or resistance point, this might mean that a price reversal is about to take place, but sometimes it can be difficult to ascertain if the resistance line was actually touched or if the movement was a brief irregularity.
The Plus500 platform’s bar chart provides a little bit more information than a line chart. It shows Bitcoin’s open, high, low, and close prices over a specified period of time. The chart consists of a collection of bars, where each vertical line represents the difference between Bitcoin’s high and low price for a selected time frame, while a bar to the left marks the opening price and a bar to the right marks the closing price.
Bar charts can give a lot of information about a Bitcoin trading session at a glance. Long vertical lines point to periods of high volatility on the Plus500 platform, where there was a lot of price movement between the high and the low points. Short bars appear when there is little price movement.
You can also get information from the placement of the horizontal lines. If the opening and closing points are far away from each other, then traders were active during that session. If the two spots are close together, then traders were less sure about how to trade.
Candlestick (or Candle) charts on the Plus500 platform show similar information to a bar chart. In both types of charts, there is a vertical line that shows the high and low prices for a selected time period.
However, with candlesticks, the space between the open and close points is coloured in to form a candle, with the vertical line sticking out of the top and bottom of the candle’s body like a wick. The body is coloured red if Bitcoin prices were higher at the open than at the close, and the body is coloured green if the close price was higher than the open.
When the candlesticks are plotted on a chart, they can form different patterns. These patterns were first defined by Japanese commodities traders in the 1700s. It was discovered that some regularly occurring patterns can be used to predict short-term price movements. Eventually, some Bitcoin traders also decided to use candles as a way to find tendencies towards bullish and bearish trends.
You can even tell uptrends and downtrends by looking at the main colours that appear on the bars. When you see more green, this signifies an uptrend, while more red points to a downtrend.
A Bitcoin rate chart has a list of BTC/USD prices for specific dates. Bitcoin’s first price increase occurred in 2010 when the price for a single coin went from $0.0008 to $0.08, and since then there have been numerous price fluctuations for traders to measure. Traders can use Bitcoin rate charts to see historical rates for the cryptocurrency. This is one way to create forecasts and see historical data and trends.
Because Bitcoin is decentralized, it goes through periods of high volatility. To trade Bitcoin well, it’s important to keep on top of how prices are moving. Many traders keep track of Bitcoin prices in real-time using live Bitcoin charts. This type of chart can also be used for detailed trading analysis.
Unlike fiat currencies, Bitcoin is run through peer-to-peer technology. This means that there is no Central Bank or other authority to set the value of how much Bitcoin is worth. The value of the cryptocurrency is reflected entirely by how much buyers are willing to pay for Bitcoin, and at what price sellers are willing to part with it.
Because USD is the world’s most widely used currency, it makes sense that the Bitcoin / USD pair (BTC/USD) is also used extensively by traders. This is a good reason to pay attention to the Bitcoin chart for USD to see how the crypto is performing.
Bitcoin charts are one way to see a price history for the cryptocurrency which can be used as part of the decision-making process during trading. There are several different kinds of charts that each offer different benefits to traders.
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