What are candlesticks?

You see green and red “candles” on a crypto chart and wonder what exactly they show? Think of each candle as a short summary of the price action. If you’ve chosen an hourly chart, each candlestick describes one hour. On a daily chart, it describes one day. You’ll also see them called “Japanese candlesticks.”

The thick part, the body of the candle, connects the opening price to the closing price. The thin lines above and below, known as wicks or shadows, reach the highest and lowest prices of the period. Usually green means the close was above the open and red means it was below, although colors can be changed in the settings.

For example, imagine a token that within one hour opens at €10, climbs to €12, falls to €9 and closes at €11. The body stretches from €10 to €11, while the wicks reach €9 and €12. The candle shows these four points, but not the order in which the high and low occurred.

Why it matters

Candlesticks help you read more than a simple price line. A large body shows a big gap between the open and the close. A long upper wick shows the price went higher but didn’t close there. This information is used in technical analysis, often together with trading volume and support and resistance levels.

What to watch out for

A candle that is still forming can change its body, color and wicks until its period closes. Also, a green hourly candle can sit within a sharply falling day. The time frame changes the picture.

We treat candlestick patterns as indications, not predictions. No pattern guarantees the next move. Also check which trading pair and which exchange the chart refers to: different markets can show different candlesticks for the same cryptocurrency.