Support level refers to the position where prices stop falling and rebound due to increased buying or weakened short selling when the price drops to a certain level. Support levels are key references in trading and can help determine entry points, stop-loss levels, and trend reversal points. Here are detailed judgment methods:

1. Technical analysis

(1) Historical lows

• Concept: A support level forms near a position that has been rebounded multiple times after the past price touches a certain low.
• Operation:
• Look for obvious lows in the candlestick chart, such as the low from the previous day, week, or month.
• Multiple touches without breaking the low provide stronger support.

(2) Moving averages

• Concept: Moving averages are dynamic support positions, and prices usually find support when approaching the moving average.
• Operation:
• In an upward trend, short-term moving averages (e.g., MA(7), MA(25)) typically provide support.
• Turning points or overlapping areas of moving averages (e.g., MA(99)) may provide strong support.

(3) Fibonacci retracement lines

• Concept: Fibonacci levels are a set of key levels calculated from high to low, with common support levels being 0.382, 0.5, and 0.618.
• Operation:
• Draw Fibonacci retracement lines from obvious high and low points, observing whether the price finds support at these levels.

(4) Trend lines

• Concept: Trend lines can be drawn by connecting multiple low points.
• Operation:
• In an upward trend, connect two or more low points to form a support line.
• Prices tend to find support when they drop near the trend line.

2. Volume analysis

(1) Dense transaction areas

• Concept: When prices linger in a certain area for a long time with high trading volume, this area is likely to form a support level.
• Operation:
• Observe the lower edge of the sideways consolidation area (the lows that have been touched multiple times).
• If the price approaches this area and trading volume increases, a rebound may occur.

(2) Price-volume relationship

• Concept: When the price drops to a certain position and trading volume significantly increases, it indicates enhanced buying strength, which may form a support level.
• Operation:
• Observe the trading volume during the decline; if there is a volume surge at the low point, it indicates effective support.

3. Psychological price levels

(1) Round numbers

• Concept: Round numbers (e.g., 0.40, 0.50) or important psychological price levels often serve as support levels.
• Reason: Traders are prone to buying or stop-loss actions near round prices.
• Operation:
• Mark round price levels and pay attention to performance when prices approach these levels (e.g., sudden increases in trading volume or candlestick reversals).

4. Candlestick patterns

(1) Reversal patterns

• Concept: When prices drop to a certain level and show clear reversal signals, it indicates effective support.
• Common patterns:
• Hammer: Long lower shadow, indicating strong buying power.
• Double bottom or head and shoulders bottom: Price rebounds after multiple touches of the same low.
• Bullish engulfing: After dropping to a low point, the next bullish candlestick completely engulfs the previous bearish candlestick.

(2) Consolidation range

• Concept: Prices fluctuate within a certain range, with the lower edge of the range often serving as a support level.
• Operation:
• Mark the low points of the consolidation range and observe the price reaction as it approaches these lows.

5. Comprehensive methods: Overlapping multiple signals

Combining multiple judgment methods can more accurately identify support levels:
• Historical lows + trading volume: A certain historical low coincides with a volume spike, making the support level more reliable.
• Fibonacci + trend lines: When a Fibonacci retracement level overlaps with an upward trend line, it forms strong support.
• Psychological price levels + candlestick patterns: A long lower shadow or reversal pattern near round numbers confirms support.

Case analysis: How to identify support levels

Assuming the current#DOGE price is 0.46 USDT, how to identify support levels in a downtrend?

1. Historical lows:
• Check previous lows, such as 0.45 or 0.44, which may be potential support areas.
2. Moving average analysis:
• If the MA(99) moving average is near 0.445 and the price rebounds when approaching it, it indicates support.
3. Fibonacci retracement lines:
• Draw Fibonacci retracement lines from the recent high of 0.50 to the low of 0.42, observing whether there is a stop in decline near 0.44 or 0.437.
4. Psychological price levels:
• 0.45 (round number), particularly pay attention to the performance when approaching this price.
5. Volume analysis:
• Observe whether the trading volume suddenly increases when prices approach 0.45 or 0.44; if there is a volume surge, a stop in decline may occur.
6. Candlestick patterns:
• If a long lower shadow (hammer) or double bottom pattern forms near 0.44, support may be effective.

Precautions

1. Support levels are usually areas rather than points:
• Support levels are generally a price range (e.g., 0.44-0.45) rather than a specific point.
2. Dynamic adjustment:
• Support levels will move as market trends change, such as the dynamic changes in moving averages.
3. Confirming effectiveness:
• Whether a support level is effective usually requires waiting for reversal signals (e.g., volume surge rebound or candlestick pattern confirmation).

By combining various methods to identify support levels, you can help more accurately choose entry points and stop-loss positions, while improving trading success rates. If further analysis of specific market conditions is needed, please pay more attention to my articles.