1. Strong coin buying strategy: Break through the trend line, catch the first wave of the upward trend
Strong coins usually perform well driven by market enthusiasm and capital inflows, often showing a clear upward trend. How to accurately capture the buying opportunity for strong coins? The simplest method is to pay attention to the breakthrough of the trend line.
Judging strong coins: You can observe through charts whether the highs and lows of the coin price are forming an upward trend. If the price breaks through previous resistance levels accompanied by increased trading volume, this is a signal of a strong coin, indicating that market funds are flowing in, and the trend may further accelerate.
Buying opportunity: When the coin price breaks through key resistance levels (such as important MA lines or support-resistance levels) and forms a new high, this is the best buying opportunity. At this point, you can choose to buy low when the price pulls back to the support level or directly buy upon breakthrough to catch the first wave of increase.
2. Weak coin selling strategy: Break below support, timely stop loss
Weak coins are a completely different story. They may be in a downward channel or in a long-term consolidation period. If you notice that the coin you hold is experiencing a significant downtrend or has broken important support levels, you should be prepared to cut losses.
Judging weak coins: Observe whether the coin price has broken through support levels. If it falls below a key support position (like the MA line or previous lows), and is accompanied by a large number of sell orders, it indicates that the coin may have entered a downward channel, making the weak situation more apparent.
Selling opportunity: Once you notice that the price has fallen below support levels, selling is the best strategy. Especially when the coin price has declined for several consecutive days without any obvious signs of rebound, stopping loss can effectively avoid further losses.
3. Volume coordination, the volume-price relationship determines the timing of buying and selling
Whether it's a strong coin or a weak coin, changes in trading volume are always significant. The volume-price relationship plays a crucial role in technical analysis within the cryptocurrency market. The rise of strong coins is usually accompanied by increased trading volume, while the decline of weak coins tends to see an acceleration in volume.
Strong coin buying techniques: Once a strong coin breaks through an important resistance level, a sudden increase in trading volume is a strong buy signal. This volume often signifies the inflow of market funds, supporting further price increases.
Weak coin selling techniques: If a coin continues to decline and trading volume gradually increases, it indicates that bearish strength is strengthening. At this point, you should consider selling in a timely manner to avoid further losses.
4. MACD and RSI assist in confirming buy and sell signals
MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) are commonly used market indicators that can help investors confirm buying and selling opportunities, avoiding emotional trading.
Strong coin buying signal: When the MACD indicator shows a golden cross (the short-term line breaks through the long-term line), and the RSI is above 30 (indicating it is no longer in an oversold state), this suggests that the market may have strong upward momentum in the short term, and buying can be considered.
Weak coin selling signal: When the MACD shows a death cross (the short-term line falls below the long-term line), and the RSI approaches or exceeds 70, it indicates that the coin is in an overbought state and there is a risk of a pullback. Considering selling is a good choice.