Candlestick Chart

A candlestick chart builds on that basic open, high, low, close snapshot by stacking hundreds or thousands of these candles side by side, turning raw price data into a visual record of the tug of war between buyers and sellers over time. Each candle's color (commonly green or white for a close above the open, red or black for a close below it) shows direction at a glance, while the thin lines above and below the body, called wicks or shadows, mark how far price strayed from the open and close before settling.

The format originated in eighteenth-century Japan, where rice trader Munehisa Homma tracked prices on the Dojima Rice Exchange in Osaka and later documented his methods in a treatise on market psychology. Steve Nison introduced the technique to Western traders in his 1991 book on Japanese candlestick charting, and it has since become the default chart type on nearly every crypto exchange and trading platform.

Traders read recurring candle shapes, such as the doji, hammer, and engulfing pattern, as clues about waning momentum or an approaching reversal, though a single candle rarely justifies a trade on its own. Because Bitcoin and other cryptocurrencies trade continuously and with high volatility, candlestick signals are usually combined with volume, moving averages, or other technical analysis tools rather than used in isolation.