Chart analysis according to Price Action focuses on current price action and support, resistance areas to assess the strength between buyers (bulls) and sellers (bears).
1. Identify support and resistance areas
• Strong support:
• Price range 4.8 - 5.0 USDT: The price has touched this area multiple times and bounced up, indicating this is an important support area that buyers are defending.
• Resistance:
• Price range 5.4 - 5.6 USDT: The price struggles to rise above this area. Sellers are under strong pressure here.
As the price approaches these areas, you need to closely observe the price action to determine which side is dominant.
2. Recent price action (Price Action)
• Previous candle:
• Small-bodied candles with long wicks appear near support at 5.0 USDT. This shows hesitation between buyers and sellers, but buyers are trying to push the price up.
• Current candle:
• The price is slightly increasing from the support area with small bullish candles, but low volume, indicating buying strength is not yet strong.
3. Identify buyers and sellers
• Buyers (bulls):
• Strongly defending the support area at 5.0 USDT.
• If the price surpasses 5.4 - 5.6 USDT, buyers will take control.
• Sellers (bears):
• Currently dominating at resistance areas near 5.4 - 5.6 USDT.
• If the price breaks below support at 5.0 USDT, sellers will take control and push the price lower.
4. Signals from candle patterns
• Doji candle pattern or small candle near support: Indicates hesitation. Sellers are weakening, but buyers need more momentum to break out.
• If a Pin Bar (long tail below) appears: This will be a good sign that buyers are in control.
• If an Engulfing candle appears: A large bullish candle engulfs the previous bearish candle, indicating buyers are gaining strength and the price may rise higher.
5. Trading strategy based on Price Action
Scenario 1: Price bounces from support
• Sign: Bullish candles with large bodies appear, closing above 5.2 - 5.3 USDT.
• Action: Buy at the breakout price or when the price retraces to test the support area at 5.2 USDT.
• Target: Resistance at 5.6 USDT or higher.
Scenario 2: Price breaks support at 5.0 USDT
• Sign: A strong bearish candle appears, large body and closing below 5.0 USDT.
• Action: Sell when the price breaks the support area with high volume.
• Target: Next support area around 4.5 USDT.
Scenario 3: Price is compressed between support and resistance
• Sign: Small candles, narrow body (sideway) appear in this area.
• Action: Wait for the price to clearly break out of support (5.0 USDT) or resistance (5.6 USDT) before taking action.
6. Market Psychology
• Buyers: Trying to accumulate to push the price up, but the strength is not yet enough.
• Sellers: Gradually losing momentum at the support area, but still in control at the resistance area.
Conclusion:
• The price is currently accumulating near support at 5.0 USDT.
• The next action will depend on whether the price breaks the resistance or support area.
• Monitor: Candle patterns such as Pin Bar, Engulfing, and volume to determine precise entry points.