How to read Bitcoin charts and predict price movements?

To read Bitcoin charts and predict price movements, most traders utilize candlestick charts, which provide more detailed information than simple line charts. These candlestick charts can represent Bitcoin's price action with various levels of granularity. For instance, a 5-minute candlestick chart is useful for analyzing very short-term price action, while a weekly candlestick chart helps identify long-term trends. Among the most popular are 1-hour, 4-hour, and 1-day candlestick charts.

Consider a 1-hour candlestick chart as an example. This type of chart is divided into "candles," each representing one hour of Bitcoin's price action. Each candlestick shows the opening price, closing price, highest price, and lowest price within that hour.

The color of the candle is also significant. A green candle indicates that the closing price was higher than the opening price, suggesting an upward price movement. Conversely, a red candle indicates that the closing price was lower than the opening price, suggesting a downward price movement. Some charts may use hollow and filled candlestick bodies instead of colors to represent the same information.