Lograthmic Vs. Linear Charts – Comparing and Understanding them (Ex. Crypto)

Lograthmic Vs. Linear Charts – Comparing and Understanding them (Ex. Crypto)

Logarithmic charts represents equivalent percentage changes in price, while linear chart measure the real time price.

Log charts give a normalized view of the price changes w.r.t. the current price.

Example: Let us take the case for Ethereum.

ethereum usd linear chart
ETH/USD Linear Chart on Kraken (TradingView)

The real difference between the charts would be that as we go higher on the y-axis (price axis), the distance between the values would decrease.

Notice the difference between the two charts, the trend is more clearly defined in the one below. From October-present time, the movements on the linear graph are small compared to the absolute value over $1500. Hence, price movements seem insignificant on it.

ETH/USD Logarithmic Chart on Kraken (TradingView)

However, on over very low time frames, one could look at the linear charts to analyse the price changes. Also, it is not recommended on shorter time-frames, since range calculations for stops and targets require absolute values.

 

Nivesh

Hello, I am an Electrical Engineer currently pursuing Actuarial studies. I work as an analyst reporter for CoinGape. Here to share my knowledge and observation of the crypto space. Feel free to contact!

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