The high point in the early stage of the contract is the resistance level of the market. We draw a horizontal line using the two previous high points, and this line can be seen as the dividing line between bulls and bears in the current market. The area above the line is the bull camp, while the area below the line is the bear camp. As long as the price remains below the dividing line, every time the price rises near this line, it will be suppressed by it. For the price to rise, it must break through this resistance line.
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When the bulls break through this resistance line (at the circled point), the original suppressive effect on the market transforms into a supportive effect. After the price breaks through this resistance line, as long as the price retraces back near this line, it will provide support for the market. This is the process of a resistance level turning into a support level. When the price retraces again near this line and receives support, we can use this as a basis to enter a long position.