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What is the impact of using a log scale vs linear scale in cryptocurrency price charts?

avatarSANJAY E ECEDec 25, 2021 · 3 years ago3 answers

In cryptocurrency price charts, what are the differences and effects of using a logarithmic scale versus a linear scale?

What is the impact of using a log scale vs linear scale in cryptocurrency price charts?

3 answers

  • avatarDec 25, 2021 · 3 years ago
    Using a logarithmic scale in cryptocurrency price charts can help to visualize the percentage changes in price more accurately. This is because a logarithmic scale compresses the higher price ranges, making it easier to see the smaller price movements. On the other hand, a linear scale represents price movements in a linear fashion, which can make it harder to see the percentage changes in the lower price ranges. Overall, the choice between a logarithmic scale and a linear scale in cryptocurrency price charts depends on the specific analysis or visualization goals of the user.
  • avatarDec 25, 2021 · 3 years ago
    When it comes to cryptocurrency price charts, using a logarithmic scale can be useful for identifying long-term trends and patterns. This is because a logarithmic scale emphasizes percentage changes rather than absolute price movements. On the other hand, a linear scale provides a more straightforward representation of price movements, which can be helpful for short-term analysis and day-to-day trading. Both scales have their advantages and disadvantages, and the choice between them ultimately depends on the preferences and goals of the individual trader or analyst.
  • avatarDec 25, 2021 · 3 years ago
    Using a logarithmic scale in cryptocurrency price charts is a common practice among traders and analysts. It allows for a better understanding of the overall price trends and helps to identify potential support and resistance levels. However, it's important to note that the choice of scale should be based on the specific analysis goals and time frame. Different scales can provide different perspectives on the price movements, and it's always recommended to experiment with both logarithmic and linear scales to see which one suits your needs the best.