Understand Crypto Charts – Recurring Market Cycles

If you want to learn how to trade cryptos the first step is to recognize market cycles.

At first glance charts may often look like completely random ups and downs and candlesticks may seem like they are performing, just coincident formations. One thing to note that is true, one chart will never look exactly like the other. It’s like living beings, they all grow differently.

Still, there are similarities recurring again and again, which you must learn to notice: Each chart always forms a general trading market cycle. This market cycle looks somewhat different in each case, but generally it follows the same overall picture:

When switching from a daily chart to an hourly view, you’ll get to notice that the market cycle pattern appears again quite often. Taking one of those hourly market cycles and switching to a 10-minute chart, you’ll again find completed market cycles on that lower time frame display. That’s why it is important to always check charts on different time frames. We’ll come to that later, to explain why that is so important.

Simply said: What goes up must come down again – every action in financial markets creates an opposite reaction afterwards. Although the level to where price comes down doesn’t necessarily have to be a reaction back to the exact same level as where it started from.

There is generally no difference between the structure of crypto market cycles and traditional stock market cycles. The only difference is that crypto markets usually move faster, so market cycles take less time to complete.

Market Cycles On Different Time Frames:

Here you see a complete market cycle on a 15 minute chart. It could even be a 1 minute chart as well as an hourly chart, as we can find those cycles on all time frames.

Generally, all pro traders know about the recurring market cycles and that charts are always moving in up and down patterns – like “waves”. A very famous theory concerning those waves is the Elliott Waves Theory, which is often used by chart analysts (not only in crypto but in any financial market).

The last image shows a market cycle which ended on a higher price level till price started to climb up again.