What is a Pullback in Crypto Trading?
A pullback is when the price of a cryptocurrency drops temporarily during an overall upward trend. In crypto trading, these price dips can last a few hours or even a few days, depending on market conditions like volatility or news events. Traders often see pullbacks as a chance to buy the asset at a lower price before the upward trend continues.
Pullbacks are helpful for traders who missed buying earlier during the price increase. The key is figuring out if the pullback is just a small dip or the start of a bigger price decline. Using tools like technical indicators can help you decide.
Trading Rules for a Pullback Strategy:
Look for coins that are trending upward but have had a pullback in the last 7 days (1 week).
Check the charts to find the nearest support level (a price where the asset tends to bounce back).
Buy the asset when it is close to the support level.