Candlestick charts are one of the most effective tools for analyzing crypto price movements. They provide detailed insights—displaying the open, close, high, and low prices within a chosen time frame—to help you determine the best times to buy or sell.
What are candlestick charts?
Candlestick charts graphically represent an asset’s price over a set period. Each candlestick shows:
The opening and closing prices
The highest and lowest prices reached
Rain’s TradingView tools simplify the analysis of candlestick charts for any cryptocurrency.
Breaking down a candlestick
A candlestick is made up of two elements:
The body: represents the range between the open and close prices
Green Body: Indicates a price increase (bullish)
Red Body: Indicates a price decrease (bearish)
The wicks (or shadows): thin lines above and below the body
The top indicates the highest price
The bottom indicates the lowest price
What candlesticks reveal
Candlestick patterns help interpret market sentiment:
Long lower wick: suggests buyers stepped in after a drop (bullish momentum)
Long upper wick: indicates sellers pushed the price down from a peak (bearish pressure)
Short or no wicks: reflects strong market momentum in one direction
Common candlestick patterns for beginners
Recognize these single-candle signals:
Doji:
Open and close prices are nearly identical
Indicates market indecision and potential reversal
Hammer:
Features a long lower wick with a small body
Signals strong buying interest and possible rebound
Hanging Man:
Similar to a hammer but appears at the top of an uptrend
Suggests potential selling pressure and reversal
Shooting Star:
Has a long upper wick with a small body
Indicates bearish sentiment after an initial price increase
Here’s how to use candlestick charts on Rain
Choose your cryptocurrency pair: (e.g., BTC/USD or ETH/BTC)
Set your preferred timeframe: (from one minute to one week or more)
Analyze the candles:
Look for patterns in the bodies and wicks
Use volume analysis to confirm trends
Candlestick charts are essential for technical analysis, enabling traders to predict market trends based on historical data. While individual signals provide insights, consider them alongside broader patterns for more accurate decisions. With Rain’s intuitive tools and advanced charting features, you have everything needed to enhance your trading strategy.