Bitcoin: Finding support & resistance basics 🤓

13 thg 4, 2020

Welcome to the VAPORWAVE_TECHNICOLOR_DREAMHOUSE~~~~~

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I’ve been asked multiple times how to identify support and resistance so I wanted to write something up to share with you all 🥳

Let’s start with some definitions

Support - the lowest point a price falls to repeatedly in a given time frame. This price is held by investors placing BUYs as the price drops, holding it steady.

Resistance - the highest price hit repeatedly for a given time frame. as the price goes up more traders are looking to cash out and SELL, limiting how high the price is capable of going.

To find support and resistance values pull up a chart with a long time window, start with 1 month and work down to 1 hour.

In the chart above we’re looking at BTC/USD over the last 18 months and we can see I’ve outlined the follow values I consider to be solid support or resistance.

$3128
$4131
$5576
$6910
$7200
$7583
$8523
$9159
$10307
$10761
$13863

Now these numbers are derived from price patterns, looking at where the candles seem to stop going up or down and finding multiple instances of this, which will indicate the “strength” of the price.

Prices may seem arbitrary but they come from other trades, where they expect a price to go (via historical data or word of mouth) and as continued values become ingrained into the minds of readers we can use this information to make informed decisions on which way we expect a price to break and where it might end up when it does.

Look at the prices and consider that other traders have the same idea you do and use that to your advantage.

As always remember the golden rule to success 🔑

BUY SUPPORT
SELL RESISTANCE

Cheers,
Banana

PS. Like this idea and want more? Join Flash Trading for daily discussion and calls!