Whether you already own bitcoin or project to get some, sooner or zometeen you’ll want to know how much the cryptocoins are worth when converted to your currency of choice.
Zometeen, you may want to know whether to suspend onto your coins or to sell them – hopefully making a little profit ter the process. However, analyzing price charts and understanding trading terms from the financial world can be rather daunting, especially for the beginner.
This guide serves spil a useful primer of the basics.
What is bitcoin’s current price?
The best place to find out the latest price of bitcoin (currency symbol: BTC or XBT) is the exchange you bought them from (Bitstamp, Bitfinex and BTC-e being the most popular exchanges at the ogenblik), or Coindesk’s own Bitcoin Price Index.
Knowing bitcoin’s current price is one thing, but pretty soon you’ll want to know where prices will go ter the future.
Methods for predicting price trends
Forecasting price movements of anything traded at an exchange is a risky probabilities spel – nobody is right all the time. Many traders have lost lots of money, if not their life savings, into such attempts.
The two main approaches to predicting price development are called fundamental analysis and technical analysis. While fundamental analysis examines the underlying compels of an economy, a company or a security, technical analysis attempts to forecast the direction of prices based on past market gegevens, primarily historical prices and volumes found on price charts.
Where to find bitcoin price charts
To perform technical analysis on bitcoin price and volume history, you’ll need bitcoin price charts that display gegevens ter a more readable manner than just plain number tables. Good places to commence are the charts on Coindesk’s Bitcoin Price Index.
To begin with: a elementary price chart
The most basic type of price chart displays prices spil a line:
Coindesk Bitcoin Price Index chart
Closing prices of any given period of time (a month, a week, a day, one hour, etc) are used to draw the price line. This kleintje of chart can be used to get a quick overview of what prices have bot doing lately, but traders need more gegevens to draw their conclusions.
Trader’s choice: the candlestick chart
The most widespread type of chart among traders is the candlestick price chart, spil seen below:
Coinstackr bitcoin price chart
Candlestick charts display more gegevens than just the closing price: each ‘candle’ shows the opening price, the lowest and highest price of the given time-period spil well spil the closing price.
Te addition, the color of the candle figure indicates whether the closing price wasgoed higher than the opening price (usually a green drankbuffet, called an ‘up-bar’) or lower than the opening price (usually with a crimson figure, called a ‘down-bar’).
Photo via Wikipedia
The candlestick chart belongs to the family of OHLC (open high, low close) price charts, but there’s a multitude of other chart types/styles to suit any advanced trader’s preference.
Another type worth mentioning is the non-time based (NTB) range chart. Beginners may find them less intuitive and more difficult to seize, however.
Candlestick price charts contain a lotsbestemming of useful information for the skilled trader’s eyes, such spil whether a candle’s spread is broad or narrow (illustrates the difference inbetween high and low prices), where the closing price is relative to the high and low etc.
Together with the patterns that groups of candlesticks form, this is what traders base their trend biases on: either bullish (rising prices), bearish (falling prices) or ranging sideways.
Some popular platforms with many of thesis features are Bitcoinity, Bitcoin Wisdom, Zeroblock and TradeBlock.
Where to go from here
Now that you’ve had an introduction to reading (bitcoin) price charts, a good idea would be to embark following bitcoin’s price development on a daily fundament. You will inevitably commence noticing certain regularities on the charts – most most likely the trending behavior of prices. Straks on you might recall that this wasgoed the point te time where you were drawn into the kunst of technical price analysis.
Trends help predict price movements, but how does one identify a trend and draw it on a bitcoin chart?
An examination of the internal workings of a digital currency exchange to find out what moves bitcoin’s price.