Brief analysis of the movement of the Solana currency as an example
Stages of movement:
1. First ascent:
The currency saw a strong rise and reached a clear resistance point where the price was pushed back and retreated.
2. Retest:
After the first pullback, the price tried to rise again but failed, leading to another pullback.
3. Third attempt:
Currently, the currency is in the resistance testing phase for the third time, which is an important indicator that buyers are showing great strength in this area.
Role of volume:
At this critical stage, it is necessary to monitor the volume movement:
If the volume is strong and increasing, it means that there is a high probability of the upward trend continuing.
If volume is weak, it may indicate a weakness in buyer power.
Conclusion:
If there is confirmed strong volume and the upward trend continues, one should consider entering the market with the upward trend and taking advantage of the future movement.
Warning: Indicators and technical analysis should always be followed carefully to ensure sound investment decisions.
Price action analysis in the second stage:
Stages of movement:
1. Breaking the first resistance:
After successfully breaking through the first resistance, the price continued to rise until it reached a second resistance point.
2. Retreat from the second resistance:
After reaching the second resistance, the price started to gradually decline with a clear decrease in momentum during the fourth and fifth attempts.
3. Turning the first resistance into support:
When the price pulled back, it stopped in the middle of the area that was previously a bullish area. This indicates that the first resistance has turned into strong support, which increases the likelihood of the price stabilizing in this area.
4. Behavior when receiving new support:
The price started to fluctuate at the new support level for a while, before trying to break through it again and move to test the second resistance again.
Conclusion:
The previous resistance turning into support is a positive sign of buyers’ strength and continued interest in the market. If the price continues to maintain this behavior, there is a high probability of breaking the second resistance in attempts.
Support and Resistance: The Foundation of Cryptocurrency Analysis
Through the above analysis of the currency and the attached chart, it is important to realize that the concept of support and resistance is the basis on which any analysis of any currency is based, whether on the Binance platform or any other trading platform.
Key points:
Support:
It is the level at which the price stops falling and starts rising due to the strength of buyers.
Resistance:
It is the point at which the price stops rising and starts to decline due to the strength of the sellers.
How to benefit?
Instead of randomly risking your money, try to understand:
1. When does the price reach the resistance level?
2. When does it reach the support level?
3. How does liquidity move between these levels?
Learning is the key:
If you master identifying support and resistance, you have the most important tool for analyzing the market and making sound decisions. I hope this information has been useful to you and will help you develop your trading skills.