If you aren’t staying up-to-date on the latest crypto market trends then you’re probably missing out on profit-making opportunities. It’s always great to pull up the latest crypto news and check out what’s occurring.
Have you been tuning into the latest in crypto news but have had trouble assessing where the market is heading? Then let us help you out by introducing to you how to analyze market trends.
Grab a coffee or tea and enjoy reading!
Identifying Crypto Market Trends
Like all markets (traditional stocks, Forex, and commodities) crypto markets also have Bull (uptrend) and Bear (downtrend) markets. The best way to decide whether it’s time to buy or sell is to understand the trend. Basically, crypto trading is a buy at support and sell at resistance game.
The trend is your friend fellas!
In general, support is defined as the level at which the fall in prices is expected to stop. The cessation of sales in the financial product at the support levels is interpreted as the reaction of the buyers from this level.
It should be kept in mind that if key support levels are broken, that is, if downward support points are crossed, sales will accelerate and the support point will now become a resistance point.
Support levels can be horizontal or trend channel points. Below you can find the examples for horizontal and trend channel supports.
Example of Horizontal Supports at Crypto Market
This BTC/USDT pair price on Binance held first horizontal support level then once it’s broken down, that point flipped to horizontal resistance and price got rejected at that level where lower horizontal support level holds BTC/USDT price level on Binance.
Example of UpTrend Channel Supports at Crypto Market
The concept of resistance can be explained as the level at which the rise in prices is expected to stop. The stopping or slowing of buying in the financial product at the resistance levels is interpreted as the sellers reacting from this level or making a profit.
When we look at the historical charts in crypto markets, the first thing that strikes is the resistance levels, where buying stops and prices cannot rise above this level. It should be kept in mind that if significant resistance levels are broken, that is, if upward resistance points are crossed, buying will accelerate and the resistance point will now become a support point.
Breaking a resistance point does not mean that prices rise above the resistance level. We can clearly say that a resistance level is broken when it closes above this level.
When we look at the historical charts in the Forex markets, the first thing that strikes us is the resistance levels where the buying stops and the prices do not rise above this level. Resistance levels can be horizontal or trend channel points.
Example of Crypto Trend Channel Resistance at Crypto Market
As you can see above, the Bitcoin/USDT pair on the Binance exchange price made a high level (1) then the price started to go down, and once new buyers came and the price increased, but was not able to break above the downtrend channel resistance at point 2 and 3. This shows that on that resistance level some crypto traders were ready to sell so the price couldn’t close above it.
Example of Horizontal Resistance at Crypto Market
The BTC/USDT pair price on Binance got rejected twice on lower horizontal resistance and got rejected five times higher at horizontal resistance.
Hopefully, now you can understand how resistance and support influence crypto market trends.
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