The crypto world can hardly make you rich, but it can make you richer.
When you are short on money, the desire to get rich quickly is overwhelming. Under this mindset, it is extremely difficult to make profits, because even if you double 50,000, you only make 50,000, which is simply not enough. In fact, doubling your money in two years is already very impressive, so you should focus on accumulating capital first.
I don't have a method to turn 50,000 into 1 million, but I have my own experience of going from 300,000 to over 10 million, so I should have a bit of authority on this issue.
I have been trading cryptocurrencies for 10 years, going from an initial investment of 300,000 with a 90% loss to now making a living from trading and achieving long-term stable profits. This is because over the past 10 years, I have understood the principles that I am sharing today. I am sharing it wholeheartedly for those who are destined to receive it. Even beginners in the crypto world can understand it, and it's worth your likes and收藏!
Trading cryptocurrencies is a simple thing, don't make it too complicated.
In the world of financial speculation, losses are like an invisible ghost, shadowing every trader. For the two outcomes of trading—profit and loss—profits always bring joy, but how to properly resolve losses often determines whether a trader's final result is profit or loss.
A very common phenomenon is that when traders experience paper losses, many choose to hold on without stopping losses. This single trade may not necessarily be wrong, as indeed many times it can recover or even turn from loss to profit. However, in terms of total trading results over a certain time period, this is indeed the main reason for the capital losses of ordinary traders.
The overestimation of human nature is the root cause of losses in trading. The financial speculation market easily creates an illusion of overestimating one's ability to control emotions and execution power. A simple example: how many people can consistently maintain a speed of 100 mph on an open highway? Most people will tend to speed up unconsciously, often without realizing it because they feel they are slowing down, and their foot will unconsciously press the accelerator. This is a kind of self-affirmation illusion.
Paper losses create invisible pressure for traders. The reason they choose not to stop losses is that they psychologically find it difficult to accept actual losses, as there is still room for reversal with paper losses. Once they stop losses, it leads to actual losses, leaving no room for recovery. However, when losses grow larger and pressure increases, traders tend to become even less rational.
In fact, the struggle between bulls and bears in trading is a psychological game. From the perspective of an economically rational person, no one would lose in trading. However, losses always occur due to pressure causing traders to become irrational. The simplest truth is that the probability of making mistakes increases, as they often happen unintentionally. This is human nature.
For trading, whether you pursue win rates or probabilities, you should understand one point: human nature is the key to trading. When facing repeated profits and losses, the emotional fluctuations of wanting to win but fearing losses are what every trader needs to reflect on continuously. To learn trading, one must first learn to be a person. The deeper philosophical truths of life are related to overcoming the negative factors of human nature, which is a prerequisite for good trading.
Today we will discuss the most commonly used and important fundamental analysis in the cryptocurrency market - support and resistance levels.
They are the core tools for determining whether prices will rebound or decline. Mastering this will help you avoid chasing highs and cutting losses, allowing you to capture actual market trends.
1. What are support and resistance levels?
📌 Support Level
The support level is the position where buying pressure increases when prices fall to a certain level, and it is difficult for prices to break below this level. This can be understood as the 'floor of prices'.
📌 Resistance Level
Resistance levels are points where selling pressure increases when prices rise to a certain height, making them difficult to break through. This can be understood as the 'ceiling of prices'.
🧠 Remember this phrase:
Support is the bottom protected by buyers, and resistance is the ceiling capped by sellers.
2. Why do these positions become support/resistance?
🔍 The principle is simple: it is the reproduction of market sentiment + historical behavioral patterns.
Many people buy near support levels because they feel the price is 'very cheap'.
Many people sell near resistance levels because they feel 'we're close to the top'.
Moreover, many people set stop-loss and take-profit orders near these key price levels, so when prices approach these areas, a large number of trades occur, making it difficult for prices to break through.
3. How to find support and resistance levels?
Now let's focus on the key points: five common methods to help you easily identify support and resistance!
✅ Method 1: Previous highs/lows method (most basic)
If the price has historically stopped falling/rising at a certain point multiple times, then that point is the future support/resistance.
📌 Example:
Bitcoin once reached a new high near $106,800 and then stopped rising → this position is an obvious resistance level.
✅ Method 2: Integer level method
The market has a natural psychological expectation for 'integers', such as BTC's 20,000, 30,000, 50,000, which often become support/resistance levels.
📌 Example:
Many people set take-profit and stop-loss orders at 30000, leading to dense trading at this point, forming pressure/support.
✅ Method 3: Trend line/channel line
Connect two or more highs or lows to draw a trend line.
When the trend line rises, it serves as support; when the trend line falls, it serves as resistance.
✅ Method 4: Moving average method (e.g., MA20, MA50)
Moving averages are the moving average lines of prices, and many people treat them as dynamic support/resistance levels.
📌 Example:
BTC has repeatedly tested MA20 without breaking through during the upward process → MA20 is dynamic support.
✅ Method 5: High transaction density area (chip concentration area)
Areas with high trading volumes are usually where buyers and sellers engage intensely, easily forming important support/resistance.
4. The conversion of support and resistance levels
Many people do not know: support and resistance levels can be interchanged!
📌 Remember this mnemonic:
Once resistance is broken, it turns into new support.
Once support is broken, it turns into new resistance.
Finding these points is not for 'divine prediction', but to allow you to make planned trades at critical positions, such as placing buy orders and setting stop losses.
5. Tips and precautions
📌 Tip 1: Support/Resistance is not a point, but a range
Do not look too precisely at a specific price; consider the 'nearby area'.
📌 Tip 2: At least two rebounds/declines must confirm to be considered effective.
Judging from just one touch is unstable.
📌 Tip 3: Combine with other indicators for judgment
RSI entering oversold at support = high probability rebound point
MACD golden cross + support stabilizing = bullish start signal
✅ Conclusion summary
Support level is the bottom that prices find difficult to break below, while resistance level is the top that is hard to break through.
Using previous highs/lows, trend lines, integer levels, moving averages, etc., can all be used to identify them.
The most important thing is to plan ahead for buying and selling at key price levels; do not chase prices up or down!
Finally, pay more attention to the eight major rules of learning:
Rule 1: Keep a close eye on the trading fluctuations of Bitcoin. Generally, Bitcoin serves as a barometer for the ups and downs of other altcoins in the cryptocurrency market. There are fewer coins like Ethereum that have strong conceptual logic and sometimes can diverge from Bitcoin's influence to form a one-sided market, but most altcoins cannot escape Bitcoin's influence.
Rule 2: Capture the golden moments of trading. The period from 12 AM to 1 AM is the most likely to see the 'money-making light'. Those looking to pick up bargains can place ultra-low buy orders before going to bed, or set ideal sell orders to earn while lying down, as this is the time when trading volumes are minimal across most parts of the world, and anything can happen.
Rule 3: Capture the price trends of the intermediate currency USDT. Generally, USDT moves in the opposite direction to Bitcoin. If one day you find USDT is rapidly rising, you should be alert to a potential sharp drop in Bitcoin; conversely, when Bitcoin is rising, it's the golden low point to buy USDT.
Rule 4: Pay attention to the financial news from central banks of various countries every day. The most important influencing factor for the cryptocurrency market's volatility is the attitude of various governments towards Bitcoin. If they are suppressing or controlling it, the subsequent market will generally experience a downward trend; additionally, the influence of American financial policy is also significant, such as the recent news about taxing the wealthy.
Rule 5: Pay attention to several key time periods to reduce risks and increase returns. The period from 6 AM to 8 AM is a key point for determining buy and sell decisions, as well as the basis for judging the day's ups and downs. If prices have been declining from midnight to 6 AM, and continue to decline during that time, it is an opportunity to buy or average down. Generally, prices will rise that day. Conversely, if prices have been rising during that time, it is a sell opportunity, and the price is likely to decline.
Rule 6: Black Friday. In the cryptocurrency market, there is a saying about 'Black Friday', where there are often significant declines on Fridays, but there can also be sideways movement or significant rises. It’s not particularly accurate, just keep an eye on the news.
Rule 7: Trading volume is the lifeline of cryptocurrencies. If a cryptocurrency with a certain trading volume declines, don’t worry; patience will ensure that you recover your investment. The short term may take a week, and the long term may take about a month. If you have extra USDT, you can average down by buying in batches. The lower the average cost, the quicker the recovery. If you have no extra funds, just wait; you won’t be disappointed.
Rule 8: Do not trade frequently. Holding a certain cryptocurrency for long-term investment rather than frequent trading can yield much higher returns, which mainly tests your patience.
Finally, remember:
The cryptocurrency market is a marathon; stability far outweighs quick wins. Gains obtained by luck will ultimately be lost due to lack of skill. Only by incorporating position management into your instincts can you survive in a brutal market.
Remember: as long as you are alive, you have the right to wait for the next turn.
No matter how diligent a fisherman is, he won't go out to sea to fish during a stormy season, but will carefully protect his fishing boat. This season will eventually pass, and a sunny day will come! Follow me, and I will teach you both how to fish and how to fish sustainably. The cryptocurrency market is always open, and only by following the trend can you have a life of following the trend. Save this and keep it in mind!
