Understanding the charts is a great deal when it comes to investing your money in a crypto project. This is because the charts can dictate the price for the next few days or even months to come. They can be used to your advantage in a way that you could buy tokens at an optimum price without any need to wait for any bear market to end and maximize your profit right on.
However, they can sometimes be misleading if not utilized well and used to serve their purpose. They can give you a false impression of a bullish market and could cost you time by waiting for the market to bounce back and regain your capital.
Also Read: How to: Patiently wait amidst market dips!
Chart patterns occur on a day-to-day basis and differ depending on the interval you are looking at. Such difference makes it susceptible for neophyte traders to believe that the market is surging upon looking at the 1-minute interval, when in truth and in fact, by looking at the 4-hour interval, the market is heading to a bearish run.
This is the reason why seasoned traders always advise other traders to zoom out, look at the market chart, see the general idea, and look for the established trend it is following. Considering that the market could recover from a dip over a period of months or even years, getting the market chart interpretation must be done right from the beginning.
In every interpretation, one must consider looking for chart patterns that are promising to begin a bullish season, seen from a zoomed-out chart and covering a long-term rally potential for its price. \
Chart Analysis for LUNA
This is a 24-hour chart pattern of Luna as of writing. Based on the chart, it seems to have broken the bearish season and started the bullish one. This means that the price could now rally from the moment forward, signaling traders and FOMO riders to buy with the expectation of immediate profits.
However, this could be a trap.
Zooming out the chart gives us an idea that the most recent rally has slowed down and already showing a descending trend. This provides us with the idea that this is not a great time to buy, and we must first wait for it to touch the trend line.
The sole objective of the crypto venture is to earn as much profit and grow our money. To achieve this, we must make sure that we possess the fundamental skill every trader must-have, which is to be able to read the charts. This is because understanding the chart patterns gives you insight into how the market is doing and how it may affect your investments as time goes by.
While it can be intimidating to read patterns, one must understand their importance upon putting your money into any crypto project. These patterns determine how its price will perform in the future, and they must not be taken lightly. They serve as our guide, and we should use them well.
Also Read: Ask the Orb: What are stablecoins?