How to Use Support Levels in Cryptocurrency Trading?
(1) In an uptrend, during a pullback, if the bearish candlestick is weaker than the previous bullish candlestick, especially when close to the support price level, and the trading volume shrinks, followed by a bullish candlestick quickly absorbing the bearish one, the price will rise again, indicating effective support.
(2) In an uptrend, during a pullback, if bearish candlesticks frequently appear, indicating increasing selling pressure, even if there is a slight rebound near the support line, if the buying power is weak, the price will eventually break below the support line, signaling a trend reversal.
(3) If a consolidation forms near the support line, after a period of consolidation, a long bullish candlestick appears, indicating that the support line is naturally effective.
(4) If a consolidation forms near the support line, but a long bearish candlestick slides through the support line, investors will rush to escape to minimize losses, and the price will continue to decline for a while.
(5) If the price breaks below the support line, it indicates that the trend will change from an uptrend to a downtrend. Generally speaking, in a strong uptrend, if an intermediate downtrend appears and the price breaks below the support line of the intermediate downtrend, it indicates that the strong uptrend has ended; in an intermediate uptrend, if a minor downtrend appears and the price breaks below the support line of the minor downtrend, it indicates that the intermediate uptrend has ended, and the price will continue to decline according to the original downtrend.
(6) If the price approaches the support line from above but fails to reach it or just touches the support level and then rebounds, if accompanied by significant trading volume, then when another downward adjustment occurs, it is a good opportunity to buy in to profit from the rebound.
(7) If the price breaks below the support line and there is significant trading volume accompanying it, it indicates the formation of another downward trend, and any slight rebound should be an opportunity to sell to avoid larger losses.
(8) If the price approaches the support line from above, although it has not broken it, but there is no trading volume accompanying it, it suggests that there is no possibility of a rebound, and one should exit the market as soon as possible.
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