What is Candlestick Chart?
Crypto Glossary Definition
A common way to graph the price of a financial asset over time. It differs from a basic line chart in that it contains more information. Each period, or 'candle', contains the open, high, low, and closing price. A green candle typically means the price has gone up, and a red one means down.
Why Candlestick Chart Matters
Candlestick charts show open, high, low, and close prices for a time period in a single visual "candle," making it far easier to spot momentum and reversal patterns at a glance than a simple line chart. They're the default chart type on virtually every trading platform and TA tool.
Candlestick Chart in Practice
A trader pulls up the four-hour chart for Ethereum ahead of a big scheduled network upgrade and switches from a plain line chart to candlesticks to get a fuller picture before deciding whether to open a position. Where the line chart only shows one closing price connected to the next, each candle now displays four data points at once - the opening price, closing price, and the highest and lowest prices reached during that four-hour window - with the thick body colored green if price closed higher than it opened, or red if it closed lower. Scanning back over the past week, the trader notices a pattern: several candles with unusually long lower wicks near a specific price level, meaning that on multiple occasions, sellers pushed the price sharply down within that period, only for buyers to step in and force it back up before the candle closed. That kind of rejection, repeated at the same level, is often read as a sign of strong buying interest defending that price. Right before the upgrade, a single long red candle with almost no wick, closing near its lowest point of the period, signals aggressive, sustained selling with no real pushback - a different and more bearish message than the rejection wicks seen earlier in the week.
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