A beginner's guide to cryptocurrency charts - Luno (2024)

The content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. Luno always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.

The world of cryptocurrency can be overwhelming when you’re getting started. There’s a million buzzwords to get your head around, and once you’ve got to grips with those, they hit you with the charts. The endless, endless charts.

If you’re looking to become a fully-fledged crypto trader, though, these charts can be an incredibly powerful tool when used correctly. Knowledge is power, and for many traders, charts are integral to their decision-making process.

What is a crypto chart?

A crypto chart is simply a visual tool that displays relevant data in such a way as to help you understand cryptocurrency price movements.

The way the data is plotted can help you see patterns in market movements identify trends as they form and help you to build a picture of the overall momentum of the market – whether bullish (people are buying and the price is going up) or bearish (people are selling and the price is going down). The theory is that this can then be used to help predict where the market is going and what the price will be in the future so you know when to buy, when to sell, and when to HODL.

There are two main formats of price charts used: line charts and candlestick charts. We’ll start with line charts.

How do line charts work?

A beginner's guide to cryptocurrency charts - Luno (1)

A linear line chart

Line charts are the most basic kind of crypto chart. Line charts display the historical price points of an asset. You’ll see a green line on the chart above. This relates to the scale of the right hand side, representing BTC’s price in USD (though it can display any local currency). For cryptocurrencies, these are generally made up of the daily closing prices within a particular time frame. Time frames for chart viewing can be measured in whatever length you want to see, whether minutes, hours, days, weeks, months, or years. If you are an experienced trader, you’ll likely want to focus on minutes and hours. If you’re a HODLer looking for longer-term investment, monthly will be more suitable.

It’s also important to remember that line charts come in two different scales: linear and logarithmic. You can easily alternate between these by toggling between them (top right hand corner of the graph above, but this will vary). In the linear chart, the price scale is divided into equal pieces. In the log chart, the crypto price is scaled according to percent changes, so if two price changes are different in absolute value yet equal in percentage, they will both be represented by the same vertical shift on the log scale. Both charts have their uses. With a linear chart, you can better judge the speed of price changes, whereas log charts make it easier to identify trends.

A beginner's guide to cryptocurrency charts - Luno (2)

A logarithmic line chart

On the left-hand side of the chart, you’ll see an axis for Bitcoin’s market cap. This is shown by the blue line. Bitcoin’s market cap simply refers to the total value of all the Bitcoin that has been issued. It’s calculated by multiplying the total number of Bitcoins in circulation by the Bitcoin price. This is a good indicator of how investors currently view Bitcoin.

At the bottom of the chart, you’ll find a black line representing historical 24h trading volumes. This can be a useful indicator of whether or not a surge in prices can be sustained. Lower volume means that there is less conviction in the market and a surge outbreak is built on weaker foundations, so the price is more likely to collapse straight back down. Higher volume, meanwhile, increases the likelihood that there is some genuine momentum in an upwards price swing.

What’s on a candlestick chart?

The candlestick chart is a more advanced trading tool containing additional useful information. It is popular among crypto traders for use in technical analysis. You can read more about technical analysis here.

A beginner's guide to cryptocurrency charts - Luno (3)

A candlestick chart

Candlestick charts can seem intimidating at first but they’re easy to understand once you get the hang of reading them. On the x-axis, you’ll find the time and on the y-axis, you’ll find the price. So far, so similar to the line chart. The big difference is the candlesticks.

The candlestick chart is so-called because each plot point on the graph looks like a candlestick. They are rectangles that are either red (or pink) or green and have a line coming out of the top or bottom, like the wick of a candle. The size of the candlestick, the wick, and the colour provide you with an array of useful information.

A beginner's guide to cryptocurrency charts - Luno (4)

The rectangle itself shows the gap between the opening and closing balance for that coin during the period you are searching. Green candlesticks indicate that the crypto rose in value so the opening price is at the bottom and the closing price is at the top. Red (or pink) candlesticks indicate that the crypto fell in price, so the opening price is at the top and the closing price is at the bottom. You may occasionally see a symbol that looks like a cross or plus sign rather than a candlestick. This is known as a doji, and it means that the opening and closing prices for the day were identical.

The “wicks”, meanwhile, either come out of the rectangle at the top or the bottom. These show the highest and lowest range of prices within that day. For example, during any 24-hour period, a coin may have opened at $100 and closed at $2000. However, at some point during the day it may have dipped as low as $500 and risen as high as $3000. This gives you an idea of how volatile the market currently is. According to proponents of technical analysis, the more volatile the market, the higher the chance that the gain (or loss) your coin suffered over the course of the day will continue or be corrected on the next trading day. This is because it shows if the market is expanding down more than it is expanding up, or vice versa.

Imagine a scenario where the wick at the top of the candle is very short. This would suggest that the coin is doing well as it has ended the day close to its highest recorded price for that day. If the wick at the top was long, it would show that, at some point during the day, the price of the coin was much higher, but people started to sell it to make a profit. This would suggest the market is about to go down or go bearish. In other words, traders want to buy the crypto at its lowest value and feel it is now. That can translate into future upward movements.

Conversely, if the wick at the bottom of a candle is short, it suggests that people are still selling the coin. This adds to the supply and suggests the price is likely to go down even further. However, if the wick at the bottom is quite long, then it suggests the price of the coin has already dipped, and people have started buying it again, hoping to get it at its lowest value. This may result in an upward movement on the following day. This can be seen in the hammer candlestick pattern (below). It represents a short body with a lower tail and can be seen at the bottom of the downward trend.

A beginner's guide to cryptocurrency charts - Luno (5)

An example of bearish candlestick patterns is the hanging man. This has the same form as a hammer, but it can be found at the end of the upwards trend, so the closing price in this case is lower than the opening price.

A beginner's guide to cryptocurrency charts - Luno (6)

Moving averages

Finally, another important line you will likely encounter when analysing crypto charts is moving average indicators. These lines are based on the average closing price of a coin over a specified period of time.This indicator is useful for seeing patterns and helping to determine trends and signals for entering and exiting positions.

For example, you would calculate a 50 day moving average by adding up the closing prices of a coin for each of the 50 trading days prior to that day and dividing it by 50.

A beginner's guide to cryptocurrency charts - Luno (7)

To make it easier, let’s say we want a 5 day moving average. The price action over the 5 days prior was $10, $8, $12, $15, and then $20. The moving average therefore will be the sum of these figures, divided by 5, which is 13.

And there you have it – the basics of cryptocurrency charts. If you have any more questions about different areas of the mean, feel free to reach out to us on Twitter. In the next blog in this series, we’ll be going into more detail about how to actually use these charts to predict future price movements using technical analysis, focusing on trend lines, resistance levels, and more.

Keep reading…

A beginner’s guide to crypto trading strategies

A beginner’s guide to crypto market analysis

Top crypto trends to watch out for in 2020

A beginner's guide to cryptocurrency charts - Luno (2024)


How does Luno work for beginners? ›

It is focused on short-term investment – you buy cryptocurrency at what you consider a low price based on anticipated short-term movements, in expectation that the price will move in your favour and you are able to sell your investment at a profit (although sometimes the price does the opposite of what you were ...

How to read Luno charts? ›

Green candlesticks indicate that the crypto rose in value so the opening price is at the bottom and the closing price is at the top. Red (or pink) candlesticks indicate that the crypto fell in price, so the opening price is at the top and the closing price is at the bottom.

How to make money daily on Luno? ›

10 Best Ways to Make Money With Luno in South Africa
  1. Buy and Hold Cryptocurrencies. ...
  2. Luno Savings. ...
  3. Day Trading. ...
  4. Recurring Buys. ...
  5. Staking. ...
  6. Price Spread Arbitrage. ...
  7. Luno Affiliate Program. ...
  8. Become a Luno Power Trader.

What are the disadvantages of Luno? ›

However, Luno does have its drawbacks. Its selection of cryptocurrencies is somewhat limited due to how picky the platform is, and it lacks advanced trading tools that more experienced traders might seek.

Is trading on Luno worth it? ›

Luno is legit, and a great exchange for novice users, but the difficulty of accessing customer care and finding relevant information might make it off-putting to crypto veterans.

Is Luno available in the USA? ›

In conclusion, Luno is available in the USA, but only in 35 of the 50 states. If you are located in one of the states where Luno is available, you can create an account and start trading cryptocurrency. However, you will need to verify your identity and deposit funds before you can start buying and selling.

How do you study crypto charts? ›

Understanding support and resistance are one of the most crucial parts of reading a crypto chart. Support levels in charts refer to a price level that the asset does not fall below for a fixed period. In contrast, resistance level refers to the price at which the asset is not expected to rise any higher.

How to analyze crypto market for beginners? ›

The cornerstone of fundamental analysis is earnings per share or EPS.
  1. How Does Cryptocurrency Work?
  2. Review the White Paper.
  3. Research the Team.
  4. Learn About the Leadership.
  5. Get to Know the Community.
  6. Understand the Technology.
  7. Understand the Vision.
  8. Review the Road Map.

How much is 1 bitcoin in Luno? ›

72,701,255 NGN

Does money grow on Luno? ›

There are several ways you can potentially earn money using the Luno exchange: Buying and holding: You can buy cryptocurrencies on the Luno exchange, and then hold onto them in the hopes that their value will increase over time. If the value of the cryptocurrency you hold increases, you can then sell it for a profit.

Can you cash out on Luno? ›

Select your local currency wallet and then WITHDRAW. Select your bank account (If you haven't linked your bank account yet, you will be prompted to do that) Enter the amount you'd like to withdraw and select NEXT. You'll see a screen showing your withdrawal amount and fee.

Is it safe to keep money in Luno? ›

Luno will keep your cryptocurrency safe, but only you can protect your wallet from being accessed by intruders. If your sign-in details are stolen and used to steal crypto from your Luno wallet, there's nothing you or Luno can do to get it back.

How long does Luno take to pay out? ›

Check you're signed in to your Luno account. We process withdrawals every business day, excluding weekends and public holidays. Some banks will clear the payments within a few hours, while with others it can take up to two business days.

What app is better than Luno? ›

We have compiled a list of solutions that reviewers voted as the best overall alternatives and competitors to Luno, including Coinbase Wallet, Trust Wallet, Exodus, and Bread Wallet. Have you used Luno before?

What is the minimum amount to invest in Luno? ›

Minimum amounts to buy/sell on Luno
CurrencyMinimum amount
MYR2 – 3
ZAR2 – 10
NGN100 – 300
1 more row
Aug 8, 2017

How do I withdraw money from Luno? ›

Sign in to your Luno account and follow these steps:
  1. Choose Wallets from the menu.
  2. Select your local currency wallet and then WITHDRAW.
  3. Select your bank account (If you haven't linked your bank account yet, you will be prompted to do that)
  4. Enter the amount you'd like to withdraw and select NEXT.

How do I buy and sell with Luno? ›

Here's how to use market orders
  1. Log in to the Luno Exchange.
  2. On the web, go to the place order ticket section to the right, and on mobile, select PLACE ORDER at the bottom.
  3. On the Place Order ticket, select Market.
  4. Select either Buy or Sell, enter the Best available price and an amount.
  5. Select (Buy/Sell) to place your order.

What are the payment methods for Luno? ›

Cash and cheque deposits. Deposits from e-wallets (e.g. BigPay) Deposits from debit and credit cards. Foreign currency deposits or deposits from foreign bank accounts.


Top Articles
Latest Posts
Article information

Author: Rubie Ullrich

Last Updated:

Views: 5249

Rating: 4.1 / 5 (52 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Rubie Ullrich

Birthday: 1998-02-02

Address: 743 Stoltenberg Center, Genovevaville, NJ 59925-3119

Phone: +2202978377583

Job: Administration Engineer

Hobby: Surfing, Sailing, Listening to music, Web surfing, Kitesurfing, Geocaching, Backpacking

Introduction: My name is Rubie Ullrich, I am a enthusiastic, perfect, tender, vivacious, talented, famous, delightful person who loves writing and wants to share my knowledge and understanding with you.