What is the biggest fear in trading cryptocurrencies? "Chasing the rise at the peak and selling at the bottom"?
Here’s what the main players often use as "enticing signals" 👇
🔍 Trick 1: See through the "false breakout trap"—volume is the "truth mirror"!
Enticing signal characteristics:
📉 Price suddenly breaks through the resistance level, but the volume doesn't keep up (volume shrinks), and the K-line looks like a "lone commander"
📈 After the breakout, it quickly retraces and oscillates below the resistance level, forming a "super long upper shadow" deceptive line pattern
✅ Practical case: A certain coin suddenly surged 5% breaking the previous high, but the volume was only 60% of the previous day’s, and 30 minutes later it plummeted back to the starting point, a typical main force "test market to entice buying"!
True breakout signal:
🔥 Volume breakout (volume is more than 1.5 times the previous day's), price stabilizes above the resistance level for over 2 hours
🔥 After the breakout, the pullback doesn't fall below the resistance level (at this time, resistance becomes support), forming an "effective breakout"
🔍 Trick 2: Keep a close eye on "key support and resistance levels"—the main players love to "perform" here!
Enticing signal characteristics:
⚠️ Support level is repeatedly "falsely broken": Price briefly falls below the support line and then quickly rebounds, forming a "lower shadow bottom search", tricking you into cutting losses
⚠️ Resistance level "fakes a shot": Rises to near the resistance level and then falls back, testing multiple times but not genuinely breaking through, exhausting retail investors' patience
Key points for trend breakout:
✅ Use "Fibonacci retracement levels" to draw key points (0.618, 0.786 are strong resistances)
✅ Combine with "Bollinger Bands": Price breaks above the upper band and the Bollinger Bands open wider, only then is a strong trend initiated
🔍 Trick 3: Beware of the "indicator divergence trap"—don't be deceived by the technicals!
Enticing signal characteristics:
📉 Price makes a new high, but the MACD and RSI indicators do not make new highs (top divergence), indicating insufficient upward momentum, possibly the main player is pushing the price up to sell
📈 Price makes a new low, but the indicators do not make new lows (bottom divergence), possibly the main player is smashing the price to accumulate
Correct usage:
✅ After divergence appears, do not immediately place trades! Wait for "indicator recovery + price confirmation":
For example, after a top divergence, the price needs to break below the previous low to confirm a downward trend, and after a bottom divergence, the price needs to break above the previous high to confirm an upward trend
✨ Practical trading mantra (memorize it!):
"Volume and price rise together to chase the rise, breakouts with shrinking volume, exit quickly;
Observe support and resistance more rounds, wait for confirmation after divergence!"
(Note: This is only personal operational experience, not investment advice and for reference only)
