How to Read Crypto Charts: The Only Guide You'll Ever Need

I used to stare at charts for hours.

Confused. Overwhelmed. Seeing patterns that weren't there. Missing patterns that were.

Then I learned to actually read charts. Not guess. Read.

Let me teach you.

The Chart Reading Framework

Here's my framework for reading any chart:

1. Trend: Which direction is price moving?
2. Structure: Where are the key levels?
3. Context: Where is price relative to those levels?
4. Action: What is price doing right now?

That's it. Four questions. Answer them, and you understand the chart.

Step 1: Identify the Trend

Before anything else, determine the trend.

Uptrend signs:

• Higher highs (each peak higher than the last)
• Higher lows (each dip higher than the last)
• Price above moving averages

Downtrend signs:

• Lower highs (each peak lower than the last)
• Lower lows (each dip lower than the last)
• Price below moving averages

Range signs:

• Highs at similar levels
• Lows at similar levels
• Price bouncing between support and resistance

Don't overcomplicate this. Look at the chart. Is it going up, down, or sideways?

Step 2: Mark the Structure

Structure means the key levels where price reacts.

Support: Levels where price bounced up before Resistance: Levels where price bounced down before

How to find them:

• Look for areas where price reversed multiple times
• Round numbers often act as levels ($50,000, $100,000)
• Previous highs become resistance
• Previous lows become support

Mark 3-5 key levels. Not 50. Just the important ones.

Step 3: Understand Context

Where is price relative to your levels?

• At support: Potential bounce zone. Look for longs.
• At resistance: Potential rejection zone. Look for shorts.
• In the middle: No clear edge. Wait for price to reach a level.

Context also includes:

• Where are we in the trend? Early, middle, or late?
• Is there a pattern forming?
• What's the higher timeframe showing?

Step 4: Read the Action

What is price doing right now?

Candlestick patterns to know:

Bullish patterns:

• Bullish engulfing: Big green candle swallows previous red candle
• Hammer: Small body, long lower wick (at support)
• Morning star: Three-candle reversal pattern

Bearish patterns:

• Bearish engulfing: Big red candle swallows previous green candle
• Shooting star: Small body, long upper wick (at resistance)
• Evening star: Three-candle reversal pattern

Neutral patterns:

• Doji: Small body, wicks on both sides (indecision)
• Inside bar: Current candle inside previous candle's range (consolidation)

You don't need to memorize 50 patterns. These basics cover 90% of situations.

Putting It Together

Let me walk through reading a chart.

Step 1: Trend Looking at the daily chart. Higher highs, higher lows. Price above 20 EMA. Clear uptrend.

Step 2: Structure Support at $48,000 (bounced twice). Resistance at $52,000 (rejected twice). Current price: $49,500.

Step 3: Context Price is between support and resistance, closer to support. In an uptrend. Pulling back from recent high.

Step 4: Action Today's candle is a hammer at $49,000. Long lower wick showing buyers stepping in.

Conclusion: Uptrend + pullback to support zone + bullish candle = potential long entry.

That's chart reading. Systematic. Logical. Not guessing.

Timeframe Selection

Which timeframe should you use?

Higher timeframes (Daily, Weekly):

• Show the big picture
• More reliable patterns
• Slower, fewer trades

Lower timeframes (1H, 15m, 5m):

• Show the details
• More noise, less reliable
• Faster, more trades

My approach:

• Use daily/4H for trend and structure
• Use 1H/15m for entries
• Ignore 1m/5m (too noisy)

Always check higher timeframes first. They provide context for lower timeframe trades.

Common Chart Reading Mistakes

Mistake 1: Too Many Indicators

Your chart has RSI, MACD, Bollinger Bands, 5 moving averages, and Ichimoku Cloud.

You can't see the price anymore.

Remove everything. Start with just candles. Add one indicator at a time, only if it helps.

Mistake 2: Seeing Patterns Everywhere

"That's a head and shoulders! No wait, it's a cup and handle! Actually, it's a dragon pattern!"

Stop. Most "patterns" are noise. Focus on the basics: trend, support, resistance.

Mistake 3: Ignoring Higher Timeframes

You're trading the 5-minute chart. You see a perfect long setup.

But the daily chart is in a clear downtrend.

Always check higher timeframes. They override lower timeframes.

Mistake 4: Analysis Paralysis

You've been staring at the chart for 2 hours. You've drawn 47 lines. You still can't decide.

If it's not obvious, it's not a trade. Move on.

Mistake 5: Confirmation Bias

You want to go long. So you only see bullish signals. You ignore the bearish ones.

Be objective. See what's there, not what you want to see.

The Levels That Matter

Not all levels are equal. Here's what makes a level significant:

Multiple touches: A level tested 5 times is stronger than one tested once.

Timeframe: A level on the daily chart is more important than one on the 15-minute chart.

Round numbers: $50,000 is more significant than $51,347.

Previous highs/lows: All-time highs and significant lows are important.

Volume: Levels with high volume are more significant.

Focus on the levels that check multiple boxes.

Reading Volume

Volume tells you conviction.

High volume + price move: Conviction. The move is real. Low volume + price move: Weak. The move might fail. High volume + no price move: Absorption. Big players accumulating or distributing.

Volume spikes at key levels are particularly important. They show that level matters.

Chart Patterns Worth Knowing

Keep it simple. These are the only patterns I trade:

Continuation patterns:

• Flag/pennant: Consolidation after a move, then continuation
• Triangle: Compression before breakout

Reversal patterns:

• Double top/bottom: Two tests of a level, then reversal
• Head and shoulders: Three peaks, middle highest, then reversal

My favorite:

• Failed breakout: Price breaks a level, immediately reverses. Trapped traders provide fuel.

Don't memorize 100 patterns. Master these few.

Automating Chart-Based Trades

Once you can read charts, you can automate your setups.

With dashpull, I define conditions based on what I see:

Support bounce setup:

• Price within 1% of support level
• Bullish candle pattern
• Volume above average

Breakout setup:

• Price breaks above resistance
• Volume spike on breakout
• Pullback to broken level

The system watches for these conditions. When they appear, it executes.

I still do the analysis. I identify the levels. But execution is automated.

The Bottom Line

Chart reading is a skill. Not a gift. Not magic. A skill.

The framework:

1. Identify the trend
2. Mark key levels
3. Understand context
4. Read the action

Keep it simple. Trend, structure, context, action. That's all you need.

dashpull helps me act on what I see. Conditions defined. Execution automated. No hesitation.

The chart is talking. Learn to listen.

Ready to trade what you see? Try dashpull →