How to make Crypto Market Analysis with OHLC Charts

OHLC data has been added to our exchange's API. A good time to learn how to read OHLC charts, spot token trading trends and make your own crypto market analysis.

How to make Crypto Market Analysis with OHLC Charts

Hello everyone!

Just wanted to highlight that OHLCV data has now been added to our exchange's API. Following the request via our forum, Saturn's development team were able to implement this feature to Saturn's API in just five days. It really goes to show that we are listening to your feedback and want you to be part of how our trading platform continues to develop!

I thought this could be a good opportunity to go over what OHLCV data is exactly and how to read an OHLC chart. This will allow you to spot token trading trends and make your own crypto market analysis. Being able to read an OHLC chart can really help you spot bigger crypto trends and how the cryptocurrency market is feeling overall, so it is a great tool to add to your repertoire.

What is OHLC chart?

OHLC stands for open-high-low-close, generally, you will see it referred to as an OHLC chart. This is a type of bar chart that shows open, high, low and closing prices. One of the reasons that cryptocurrency traders or market analysts prefer this type of data display over a line chart is because it allows them to quickly evaluate volatility within the day and also see where prices opened & closed.

How to read an OHLC chart?

An OHLC chart will contain a vertical line with two short horizontal lines extending to the left and right. When you look at a period, the horizontal line that extends to the left represents the opening price and the horizontal line extending to the right represents the closing price.

ohcl

The height of the vertical line represents the coin or token's price range for the period, with the high showing the period's highest price and the low showing the period's lowest price.

You may find colours being used, red normally indicates the closing price was lower than the period's opening price & green or black to show the opposite. Often crypto traders will use them to interpret the day-to-day sentiment of a coin or token market as they easily show if the market is bearish or bullish.

How does an OHCL chart help you make crypto market analysis?

There are a couple of ways you can use OHCL data to your advantage for technical analysis of crypto markets:

  • Bar/line colours: If you are looking to gather insights with a quick glance, then you could simply go off the colours of red or green as indication if the market is trending high or low. Of course, we would recommend making more in depth analysis but it could be helpful if ever you need to make a quick token trading decision.
  • Vertical height: The higher the vertical line the more prices have been seen during a period, this indicates that the market is more volatile & indecisive. If the vertical line is small, then you know the price has remained quite stable for the period.
  • Horizontal line position: Remember that the horizontal lines indicate where the asset's price closed relative to its highs and lows. For example, if a token's price was known to be rallying (a period of continued increase) but then the close was much lower than the period's high, you may make the assumption that the token's price rally is coming to an end.

Hope you found this article helpful in understanding OHCL charts and how you interpret them to analyse token markets in cryptocurrency trading. If anything is unclear, please do not hesitate to ask via our forum.

Happy trading!

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