Technical Analysis (TA) is a method of forecasting price trends based on historical market data, mainly price and volume. Unlike fundamental analysis, which relies on factors such as the development team, technological potential or news related to the project, technical analysis does not care about the intrinsic nature of the asset but only focuses on past and present market behavior. It is based on the assumption that all factors affecting prices – including market psychology, news, policies, events – are already reflected in the price chart. Therefore, instead of trying to analyze “why the price changes”, technical traders will care about “what the price is saying” and “in what direction the price may continue”.
In the crypto market, where volatility is fast and strong, information is not always clear or is dominated by crowd psychology, technical analysis plays a very important Vai , especially for short-term investors who need to make quick and effective buying and selling decisions. Crypto is a 24/7 market, without fixed trading sessions like traditional stocks, so price patterns, technical indicators and price actions can become clear and react immediately. Therefore, mastering technical analysis will help investors easily adapt to constant volatility and exploit short-term trading opportunities effectively.
Technical analysis helps traders answer three core questions before placing any orders. First, what is the current market trend? This is a guiding question, because “trend is your friend” – trading with the trend always has a higher probability of success than trading against the trend. Correctly identifying the trend will help traders avoid entering orders early or against the main thrust of the market, thereby limiting unnecessary losses.
Second, which price zones are good to buy, and which are good to avoid? In TA, identifying support and resistance zones is one of the most important skills. These zones reflect where buying or selling pressure has had a strong impact on price in the past, and may repeat itself in the future. For example, if a coin bounces multiple times when it hits $20,000, the price zone around $20,000 can be XEM strong support. Conversely, if the price is rejected multiple times at $30,000, that zone is considered resistance. Knowing these zones helps traders choose advantageous buying points and avoid getting caught in unfavorable price zones.
Identifying support and resistance zones is a basic skill in technical analysis.
Third, where is the appropriate entry, stop loss and take profit point? This is the risk management aspect of technical analysis, and is also the key factor that determines the long-term survival of a trader. A successful trader not only knows when to enter an order, but also knows when to withdraw to preserve Capital. Technical analysis helps set Stop-Loss levels - the point to cut losses when the transaction goes against expectations, and Take-Profit - the point to take profits when the target is achieved. In addition, TA also helps evaluate the risk/reward ratio, thereby only executing orders with a high probability of winning and a reward large enough to compensate for the risk.
Another big advantage of technical analysis in the crypto market is the repeatability of price action. Because financial markets are driven by human psychology – fear, greed, hope, doubt – price patterns tend to repeat themselves. Technical analysis does not guarantee a 100% win rate, but it does provide a clear, logical, and historically verifiable framework from which traders can build strategies, test them, and improve them over time.
For beginners, technical analysis can be overwhelming due to the sheer number of tools and indicators. However, TA is not about using as many indicators as possible, but rather finding a suitable, simple yet effective system and sticking with it. In the following sections of the course, you will learn each core element of TA from basic to advanced, including chart types, Japanese candlestick patterns, support - resistance, breakouts, popular technical indicators such as RSI, MACD, Bollinger Bands, and how to build a complete trading strategy.
There are many indicators in technical analysis, however, more is not better, sometimes it can easily cause disturbance in analysis and order entry.
Understanding and using technical analysis well not only helps you make more effective trading decisions, but also helps you form the mindset of a disciplined, systematic investor and control your emotions throughout your crypto investment journey.
PRICE CHART AND TIME FRAME
In technical analysis, price charts are a tool for visualizing market data, helping traders grasp the movement of prices over time. Understanding and mastering the different types of charts and time frames is the foundation for delving into advanced analysis techniques later. If technical analysis is considered a language, then price charts are the “original text” that you need to learn to read and understand first.
There are three common types of price charts used in technical analysis: candlestick charts, line charts, and bar charts. Each type of chart presents data differently and serves different analytical purposes.
There are many different types of charts in technical analysis, however the most common is the candlestick chart.
Japanese candlestick charts are the most commonly used type in the trading world, especially in crypto. Each candle represents the price action over a certain period of time – called a time frame. A candle consists of four basic prices: the open price, the high price, the low price, and the close price. The body of the candle represents the distance between the open price and the close price. If the close price is higher than the open price, the candle body is green or white (bullish); if the close price is lower than the open price, the candle body is red or black (bearish). The upper and lower shadows represent the highest and lowest prices during that time period.
Basic knowledge of Japanese candlesticks
Thanks to its clear and intuitive presentation, candlestick charts help traders quickly grasp price behavior, buying and selling power, and easily identify candlestick patterns that have value in predicting trends. This is also a widely used chart on analysis platforms such as TradingView, Binance, Bybit and many other exchanges.
Line charts are simpler, connecting closing price points with a single line. While they don’t provide as much information as candlestick charts, line charts are useful for getting an overview of long-term trends, filtering out noise, and are easy to follow for beginners.
BTC/ USDT pair line chart
Bar charts also show four price levels like candlestick charts but use vertical bars. Although less common in crypto, bar charts are still used in some specialized strategies.
BTC/ USDT bar chart
The second concept to master is timeframe. Each chart can be Chia into different timeframes, such as: 1 minute (M1), 5 minutes (M5), 15 minutes (M15), 1 hour (H1), 4 hours (H4), 1 day (D1), 1 week (W1), etc. Each candle represents the price action during that time period. For example, on the D1 timeframe, each candle represents the price movement during one trading day; on the H1 timeframe, each candle represents one hour.
Basic time frames used by traders
Choosing the right time frame depends on your trading style:
For short-term traders (scalpers or day traders), small timeframes such as M5, M15, H1 are popular. Order entry/exit decisions are made quickly and require quick reactions.
For medium-term traders (swing traders), the H4 or D1 time frame helps to see the trend more clearly and avoid being disturbed by small fluctuations.
For long-term investors (position traders), the W1 or even Monthly time frame will be suitable to identify major trends and manage positions according to market cycles.
A good analysis strategy will often combine multiple time frames to make more accurate decisions. This is called multi-timeframe analysis. For example, a trader can use the D1 time frame to determine the main trend, then move down to H1 to find the optimal entry point.
Understanding the nature of chart types and how time frames work will help you read charts more effectively, know what the “big picture” is and what actions to take in each specific situation. This is an important foundation for all later analysis techniques such as recognizing candlestick patterns, drawing trend lines, determining support and resistance or using technical indicators.
