How to Read Crypto Charts — Technical Analysis for Beginners

Why Learn Chart Reading?

Technical analysis is the skill of reading price charts to predict future movements. While no method is 100% accurate, understanding charts gives you a significant edge over traders who rely on gut feeling.

Every professional crypto trader uses technical analysis. The good news? The basics are simple to learn and can be applied immediately.

Understanding Candlesticks

Candlestick charts are the most common way to view price data. Each candle shows four data points: open, high, low, and close for a specific time period.

A green (bullish) candle means the price closed higher than it opened. A red (bearish) candle means the opposite. The thin lines (wicks) show the highest and lowest prices during that period.

Common candlestick patterns like Doji, Hammer, and Engulfing can signal potential reversals or continuations.

Support and Resistance

Support is a price level where buying pressure historically prevents further decline. Resistance is where selling pressure prevents further increase.

These levels act like floors and ceilings for price. When price breaks through resistance, it often becomes the new support — and vice versa.

Drawing support and resistance lines on your chart is one of the most powerful and simple techniques in trading.

Moving Averages

Moving averages smooth out price data to show the overall trend. The two most important ones are the 50-period and 200-period moving averages.

When the 50 MA crosses above the 200 MA, it's called a 'Golden Cross' — a bullish signal. When the 50 crosses below the 200, it's a 'Death Cross' — bearish.

Many traders use the 20 EMA (Exponential Moving Average) as a dynamic support/resistance level for short-term trades.

RSI (Relative Strength Index)

RSI measures the speed and magnitude of price changes on a scale from 0 to 100. An RSI above 70 suggests the asset is overbought (potential pullback). Below 30 suggests oversold (potential bounce).

RSI divergence — when the price makes a new high but RSI doesn't — is a powerful reversal signal. Look for this on the daily timeframe for the best results.

Volume Analysis

Volume tells you how many units were traded in a given period. High volume confirms the strength of a move. Low volume suggests the move might not last.

A breakout on high volume is much more reliable than one on low volume. Always check volume before entering a trade based on a price pattern.

Putting It All Together

The best trades happen when multiple indicators align. For example, a price bouncing off a strong support level, with bullish RSI divergence and increasing volume, is a high-probability long setup.

Start by mastering one or two indicators, then add more as you gain experience. Bybit's built-in TradingView charts include all of these indicators for free.

Practice on Bybit

The best way to learn is by doing. Bybit offers demo trading with simulated funds — practice reading charts and making trades with zero risk.

Once you're confident, switch to real trading. Sign up through our link for reduced fees and up to $30K in signup bonuses.