Do you believe support and resistance still work in crypto?

[Stedsm]

I wanted to create a poll for this, but then I thought that I should rather ask for ideas as well as your opinion on this. I believe that we follow some areas we call as support and resistance and it works very well with forex and it did before with cryptocurrencies too. Now, I'd just like to know whether you actually draw those lines on your charts and believe that those areas are worth to be watched as well as turn out to be great support and resistance levels where markets can actually take a retracement or reversal, or you just don't think that they exist and the price either goes too much high when there's nothing ahead (I mean, while creating an ATH) and just shows a freefall when sellers simply dump it? I know it can be a case with some tokens which are useless with no volume, but my question is in regards to major cryptocurrencies like BTC, ETH, LTC, XRP, etc. which share the maximum volume available in the markets.

[Krabby]

 Any level of support or resistance is valid in Crypto and other centralized financial markets. Support and resistance prices are made up of crowds, not just whales. The Crypto market is also considered a financial market, with professional traders and newbies identical to the markets out there. So have confidence in the signals in the Crypto market.
In addition, there will also be relatively weak support or resistance prices, so the price can be easily manipulated at that time.

[HabBear]

I believe that we follow some areas we call as support and resistance and it works very well with forex and it did before with cryptocurrencies too. Now, I'd just like to know whether you actually draw those lines on your charts and believe that those areas are worth to be watched as well as turn out to be great support and resistance levels where markets can actually take a retracement or reversal

Yes, support and resistance still work in crypto. Support and resistance is still created by price, and price is created by investors buying and/or selling.

The only difference between forex and crypto is that there's a lot more information about forex available to influence buying and selling decisions. Forex has government policy, GDP, trade, and social economic factors that comprise all the information available about a currency. Bitcoin, for example, doesn't have much of that. So buy/sell decisions are based on less information about the market.

The new thing to consider with your support and resistance levels is what's the probability that a crypto currency will break/fall through when it hits those levels. Is it the same probability as a foreign currency? Likely not. Is it a higher probability or a lower probability? I have no idea. But that's a new metric you should measure for that would be precisely different from forex trading.

[Silberman]

I wanted to create a poll for this, but then I thought that I should rather ask for ideas as well as your opinion on this. I believe that we follow some areas we call as support and resistance and it works very well with forex and it did before with cryptocurrencies too. Now, I'd just like to know whether you actually draw those lines on your charts and believe that those areas are worth to be watched as well as turn out to be great support and resistance levels where markets can actually take a retracement or reversal, or you just don't think that they exist and the price either goes too much high when there's nothing ahead (I mean, while creating an ATH) and just shows a freefall when sellers simply dump it? I know it can be a case with some tokens which are useless with no volume, but my question is in regards to major cryptocurrencies like BTC, ETH, LTC, XRP, etc. which share the maximum volume available in the markets.

The concepts of support and resistance still apply to this market, however like any other tool you need to know when to use it, when a market is trending, whether the trend is positive or negative doesn't matter, the indicators of support and resistance are not the most useful because the price will have a tendency to break through them, however when the market is relatively stable that is when you see support and resistance playing a big role and they can be used to produce significant profits for the trader that knows how to use those indicators.

[pixie85]

Yes I do think it works with bitcoin and I can prove it to you.

During the 2018 bear market a strong level of support was 600 dollars and you can recognize that level by how many times it defended against bears.
It was attacked in June, July, August, September, October, and finally broke to the downside in November. Every month bears tried to break it and every month it bounced back above.

There's a rule that the more times a level is attacked the weaker it becomes and it is so with both supports and resistances and when a strong level is broken the following move is very strong and this is what happened with 6000. When it broke it was followed by a 50% drop in price.


This year 10000 was a strong resistance. When it broke it was followed by a strong 20% move to the upside and begun this bullish wave that will probably take us to the old ATH.

[exstasie]

Absolutely. Technical support and resistance is relevant for all liquid investment assets, including BTC and larger altcoins. The more volume and liquidity the market has, the more reliable S/R (and all technical analysis) generally is. And also as a general rule, higher time frame analysis tends to be much more reliable than lower time frames.

Looking at BTCUSD, the April-May and July-August pullbacks this year are perfect examples of retracements off very obvious weekly/monthly resistance levels that were established in 2019:

[odolvlobo]

Support and resistance are myths. The idea that investors all decide independently on the same prices to buy and sell at is absurd.

[cabron]

It does work still because we can see the support and resistance still through the fibonacci even when there is bullrun. BTC and altcoins obviously are now experiencing overbought which I think its overbought and oversold that doesn't work anymore. RSI is having trouble when there is bullrun. Some traders probably have been selling already after seeing BTC hit the above 70 of RSI indicator but found themselves buying back again.

[exstasie]

Support and resistance are myths.

How do you know?

Myth or not, horizontal S/R based on pivots and candlesticks has been crucial to my (profitable) trading system for years. To each his own!

The idea that investors all decide independently on the same prices to buy and sell at is absurd.

Why? Is it absurd that when a monthly or yearly low ("support") breaks down, a lot of people decide to sell because they expect price to fall? That seems perfectly reasonable to me! And when price eventually retraces near that level (formerly "support" and now "resistance"), and so traders and investors who have experienced drawdown collectively sell to recover their capital, is that absurd?

In line with volume analysis, support and resistance is primarily about where the break-even points and pain points of a large composite of traders and investors are. That's part of it at least. There's always the "self fulfilling prophecy" theory to consider as well: https://www.investopedia.com/ask/answers/05/selffulfillingprophecy.asp

[AbbyS]

A short answer:
Support and resistance in crypto is FOMO and FUD
This market has no rules and make no sense to me, sorry

[ashmodeus]

yes ,i believe that also exist on crypto market. even though mostly is decentralized , i mean that asset like BTC etc, somehow its works, like what happen right now, in short it's like a repeat of 2017 . probably many people ask why u believe about support or resistance level on crypto market since mostly assest backed by nothing, its pure move by buy and down by sell, nah , i've followed it and that works for me.

[JakobFugger]

Absolutely. Technical support and resistance is relevant for all liquid investment assets, including BTC and larger altcoins. The more volume and liquidity the market has, the more reliable S/R (and all technical analysis) generally is. And also as a general rule, higher time frame analysis tends to be much more reliable than lower time frames.

Looking at BTCUSD, the April-May and July-August pullbacks this year are perfect examples of retracements off very obvious weekly/monthly resistance levels that were established in 2019:

Exact. There are always points where investors pay more attention for a variety of reasons. It is essential to have an idea of what those points are. What are the reasons that led people to create a confidence to buy or sell at that price.

[Darker45]

It would have indeed been more interesting to create a poll out of this question.

While I do some little trades, I don't have the skills to come up with a reliable TA and do some nice chart reading. There might be some roles that support and resistance play in crypto but I am still in the belief that crypto is still the wild wild west in trading.

I have been failed by countless TAs in the past. I have known people who strictly adhere to technical suggestions through the charts but it seems they are still far from gaining a nice trading profit.

Countless of times I've read TAs that go like "if this resistance is shattered, the price will be expected to rise more" or "if this support cannot hold, the price might further fall down" or "we are about to test the $10,000 resistance and if we got past that, $10,200 is the next target" or "$5,000 proved to be a weak support, we will have another one in $4,900." These are all a little funny to me mainly because they failed more often than not or they're simply a matter of common sense. Or perhaps I just didn't get it.

[Savemore]

Of course it will work and it will continue working in every types of financial market. Actually support and resistance is the foundation of technical analysis, you will not understand how to analyze a certain chart if you do not know how to identify the support and resistance. In a context, support is the demand in the chart wherein you can considered as support when the price is bouncing back and not breaking down while resistance is the supply area wherein if the price are entering that area, you can see that the price is starting to reject that area. There is called role reversal and it is happening where there is breakout and breakdown in the chart. My advise is you should first master the foundation which is the plotting support and resistance because it is vital and it can help you to give good analysis.

[Durgesh728]

Support and resistance, only work on sideways market. In case of rapidly pricing market, it doesn't really work. Be it Crypto currency, forex or any equity in market.

[lixer]

Meehn, what makes you think that the support and resistance doesn’t work in cryptocurrency market?
It works really well, and if you do follow up with price analysis of the top cryptocurrencies that are being posted on Cointelegraph you are going to notice that the experts are always making use of support and resistance to predict their next move.

It’s all about knowing how to identify the support and resistance, if you don’t do it right, then how do you expect it to be right? It still works and that’s what would help you in making your buy and sell decision, and also know when to go short on resistance.

[sheenshane]

Support and resistance, only work on sideways market. In case of rapidly pricing market, it doesn't really work. Be it Crypto currency, forex or any equity in market.

I tend to agree.

Support and resistance still work not only in the foreign exchange but also in crypto exchanges.  However, we always need to bear in mind that the volatility of the price lies not only with the manipulation of the whales but also from the numbers of individuals whose demand keeps on elevating, and that serves as the main factor for the bull run that we are experiencing now.

Though support and resistance provide information on the trends and possible movement on the Bitcoin's price it only provides limited information which makes Bitcoins and other cryptocurrencies unpredictable in terms of market value.

[uneng]

Support and resistance are myths. The idea that investors all decide independently on the same prices to buy and sell at is absurd.

Well, being very direct I agree with you.
If support and resistance worked in practice there wouldn't be major crashes like that one which sent bitcoin to 2,000$-3,000$. In such a decentralized, volatile and unpredictable market where few whales movements can cause huge fluctuations I see support and resistance theory somehow pointless. How many times I have heard bitcoin was at support level, theoretically *safe* to buy, but it kept falling...

[TheUltraElite]

If you look at the age old charts you will find some support and resistance levels for sure. Now you can't rely completely on them but most of these levels are correct and previous bullish or bearish trends have been able to take down resistance or build up support levels of you know what I mean

I can't make you understand this but you have analyse some charts during bear trends because thatis where most of this support action occurs. People are buying at that price.

Like for example right now there is a bullish trend, where it is trying to cross the 18k markbut facing selling pressure, last time I checked yesterday.

[pixie85]

If support and resistance worked in practice there wouldn't be major crashes like that one which sent bitcoin to 2,000$-3,000$.

You're adding some supernatural features to support and resistance lines. They won't stop a correction from happening, it doesn't work like that.

In a crash situation previous resistance points are possible points of entry where a bounce backs or permanent reversals can occur.

Where did you see a crash to 2-3 thousand dollars? Do you mean that crash from 6000 to 3000 in 2018? That was an example of a strong resistance being broken.