Candlestick Basics
Each candle shows: Open (where price started), Close (where it ended), High (highest point), Low (lowest point). Green candle = price went up (close > open). Red candle = price went down (close < open). The body shows the open-close range. The wicks show the high-low range.
Support and Resistance
Support: Price level where buying pressure consistently stops the decline. Like a floor. When price approaches support, it tends to bounce up.
Resistance: Price level where selling pressure consistently stops the advance. Like a ceiling. When price approaches resistance, it tends to reverse down.
When support breaks, it often becomes resistance (and vice versa). This is one of the most reliable patterns in technical analysis.
Key Indicators
RSI (Relative Strength Index)
Measures momentum on a 0-100 scale. Above 70 = overbought (may drop). Below 30 = oversold (may bounce). Most useful at extremes. Period: 14 (default). Best used to confirm entries, not as standalone signals.
MACD
Shows trend direction and momentum. MACD line crossing above signal line = bullish. Crossing below = bearish. Histogram shows the distance between lines. Best on 4H and daily timeframes for crypto.
Volume
Confirms price moves. Strong moves should have high volume. Moves on low volume are unreliable and likely to reverse. Volume spikes often mark tops and bottoms.
Putting It Together
The best trades combine multiple signals: price at support + RSI oversold + volume increasing = high-probability long entry. No single indicator works alone. Use 2-3 confirmations before entering any trade. For more advanced strategies, see grid trading and our exchange reviews for the best trading platforms.
Chart Types Compared
Before diving deeper into indicators, understand the three main chart types:
| Chart Type | Best For | Shows | When to Use |
|---|---|---|---|
| Candlestick | Most analysis | Open, close, high, low + body/wick | Default for 90% of crypto traders |
| Heikin-Ashi | Trend identification | Smoothed candles (averages) | Identifying trends, filtering noise |
| Line Chart | Quick overview | Close price only | Macro trend view, non-trading analysis |
Timeframe Selection: What Actually Works for Crypto
Different timeframes serve different purposes. Using the wrong timeframe is one of the most common beginner mistakes:
| Timeframe | Trading Style | Hold Duration | Noise Level | Signal Reliability |
|---|---|---|---|---|
| 1 minute / 5 minute | Scalping | Seconds to minutes | Very high | Low (many false signals) |
| 15 minute | Day trading | Minutes to hours | High | Moderate |
| 1 hour | Intraday swing | Hours to 1 day | Moderate | Moderate-good |
| 4 hour | Swing trading | Days to weeks | Low | Good |
| Daily | Position trading | Weeks to months | Very low | High |
| Weekly | Long-term investing | Months to years | Minimal | Highest |
The 4-hour chart is the sweet spot for crypto. It filters out intraday noise while still showing clear entry and exit opportunities. Start here, then use the daily chart to confirm the trend direction and the 1-hour chart for precise entries.
Candlestick Patterns That Actually Matter
There are hundreds of candlestick patterns. Most are unreliable in crypto markets. These five consistently show up before major moves:
Engulfing Candle
A large candle that completely covers the previous candle's body. Bullish engulfing (green covers red) at support = strong buy signal. Bearish engulfing (red covers green) at resistance = strong sell signal. The larger the engulfing candle relative to the previous candle, the stronger the signal.
Doji at Extremes
A candle with almost no body (open and close nearly equal), creating a cross shape. Indicates indecision. A doji after a strong trend, especially near support or resistance, often signals a reversal. Not meaningful in the middle of a consolidation.
Hammer / Shooting Star
Hammer: small body at top, long lower wick. Appears at bottoms — sellers pushed price down, but buyers recovered most of the move. Bullish. Shooting star: small body at bottom, long upper wick. Appears at tops — buyers pushed up, but sellers rejected it. Bearish.
Three White Soldiers / Three Black Crows
Three consecutive strong green candles (soldiers) = bullish continuation. Three consecutive strong red candles (crows) = bearish continuation. Each candle should open within the previous candle's body and close above (soldiers) or below (crows) its close.
Morning Star / Evening Star
Three-candle reversal pattern. Morning star (bullish): strong red candle, small-bodied candle (indecision), strong green candle. Evening star (bearish): strong green candle, small-bodied candle, strong red candle. Most reliable on 4H and daily timeframes.
Moving Averages: The Foundation of Trend Analysis
Moving averages smooth price data to show the underlying trend. Two types matter for crypto:
EMA (Exponential Moving Average)
Reacts faster to recent price changes. Preferred by most crypto traders. The three EMAs you need:
- 20 EMA: Short-term trend. Price above 20 EMA = short-term bullish. Used for entry timing.
- 50 EMA: Medium-term trend. The most important single moving average. Institutional traders watch the 50 EMA on the daily chart.
- 200 EMA: Long-term trend. Price above 200 EMA = macro bullish. Below = macro bearish. The 200 EMA on the daily chart is considered the dividing line between bull and bear markets.
Golden Cross and Death Cross
Golden Cross: 50 EMA crosses above 200 EMA. Historically signals the start of major bull runs. Occurred before every major BTC rally. Death Cross: 50 EMA crosses below 200 EMA. Signals potential bear market. These are lagging indicators — they confirm trends rather than predict them. By the time a golden cross forms, the initial move is often 20-40% complete.
Advanced Indicators Worth Learning
Fibonacci Retracement
Measures potential pullback levels within a trend. Draw from swing low to swing high (uptrend) or high to low (downtrend). Key levels: 0.236, 0.382, 0.500, 0.618, 0.786. The 0.618 level (golden ratio) is the most significant — BTC has bounced from the 0.618 retracement level in 80%+ of major pullbacks. Combine Fibonacci with horizontal support for high-conviction entries.
Volume Profile
Shows where the most trading activity occurred at each price level. High-volume nodes act as magnets (price tends to spend time there). Low-volume nodes act as gaps (price moves quickly through them). The Point of Control (POC) — the price with the highest volume — acts as a strong support/resistance level. TradingView's Volume Profile Visible Range (VPVR) is the best implementation.
Funding Rate (Crypto-Specific)
Unique to crypto perpetual futures. Positive funding = longs pay shorts (market is over-leveraged long, potential for short squeeze or correction). Negative funding = shorts pay longs (market is bearish, potential for long squeeze or bounce). Extreme funding rates often precede reversals. Check funding on Coinglass.com. See our funding rate guide for detailed strategies.
Building a Chart Analysis Routine
Professional traders follow a consistent analysis routine. Here is a practical workflow:
- Weekly chart first. Identify the macro trend. Is BTC above or below the 200 EMA? Which direction is the trend?
- Daily chart. Find major support and resistance levels. Note any candlestick patterns. Check RSI for overbought/oversold extremes.
- 4H chart. This is your trading timeframe. Draw trendlines, identify patterns, mark Fibonacci levels.
- Check volume. Is the current move supported by volume? Low-volume rallies are suspect.
- Check funding rate and open interest. High open interest with extreme funding = potential forced liquidation event.
- Set alerts. Place TradingView alerts at key levels. Do not stare at charts all day.
Frequently Asked Questions
Which TradingView plan do I need?
The free plan is sufficient for basic analysis — 1 chart, 3 indicators, 2 alerts. If you trade actively, the Plus plan ($14.95/month) adds 10 alerts, 5 indicators per chart, and 4 charts per layout. The Premium plan ($59.95/month) is only needed for serious professional traders who need 8 charts and 100+ alerts.
Do crypto charts work the same as stock charts?
The patterns are identical — support/resistance, candlesticks, moving averages all apply. However, crypto is more volatile, trades 24/7 (no opening/closing gaps), and is heavily influenced by leverage (funding rates, liquidation cascades). Volume Profile and funding rate analysis are more important in crypto than in stocks.
What is the single most important thing on a chart?
Support and resistance levels. Everything else is secondary. If you can identify where price is likely to bounce (support) and where it is likely to reverse (resistance), you have the foundation for profitable trading. Add volume confirmation and one momentum indicator (RSI or MACD) and you have a complete system.