How to analyze charts using support and resistance lines: Example with SOL/USDT
I have been reviewing the market after Bitcoin marked a new ATH, and here is my analysis of SOL/USDT:
• In the chart, I have marked a key support line at the level of $130 and an important resistance at $200. Currently, the price is trying to break this resistance at $200. If it manages to break this level, the path to the ATH of $260 would be quite clear.
Historically, Solana has had difficulties breaking this barrier. This would be the second time it tries to overcome this resistance level; if it succeeds, we could easily see a new ATH.
⌛ For this example, I have used a weekly chart, as what we are interested in is seeing how the coin has moved historically and thus be able to identify support and resistance points in the medium to long term. To correctly plot these levels, we must find areas where the price has bounced multiple times. In this case, we can observe that at the level of $130 the price changed direction on multiple occasions when reaching this point. The same happens at the level of $200.
It is important to remember that once a resistance or support level is broken, it becomes its opposite. That is, if the price breaks a resistance level, that level becomes a support, and vice versa.
❗After reading this post, you need to put it into practice, as it is the best way to learn. If you have any doubts or questions, you can leave them in the comments and I will be happy to help you.
