Resistance In Crypto Market & Its Types - (Newbie Guide Series)

[Hamza2424]

Resistance In Crypto Market & Its Types - (Newbie Guide Series)

Hope all are doing well, I know everyone is enjoying the current market rally but the market price is not breaking through a significant range so I will try to explain why to the new ones in a very simple concept. Hope so you'll find it informative.

Overview

So as we all know the market is on the $30K and it's testing this range for a certain period. The reason why the market is not making the breakthrough through a point is the resistance in this range. So what is resistance in the crypto market?

The resistance Level / Resistance range in the market is a particular price range that the market finds difficult to surpass you can say in simple words that it is the barrier in the market price flow. So this is the basic ideology of the resistance in the crypto market. There are a few types of resistance in the market Generally there are only two types but the subcategories are also included in the topic so let's understand them one by one.

Psychological Resistance

This is the type of resistance   haha, this is not my style --sorry--. So in simple words, the concept is whenever the market faces a repeated rejection from a particular level that resistance is considered as Psychological Resistance with time. To make it more simple for you, it can be considered as let's suppose the market made ATH a price X and then started falling after a particular point back and came to the same level now as investors know this was the time high and a maximum of the investors made their investment in the market to make a profit at least close to ATH and the market is already now on ATH this point is the point of exit for those traders and investor investors because their phycology that market will drop again from that point or some of them might think why to take more risk I am already in profit so lets book.

This type of investor attitude and market traders' sentiments creates psychology and psychology becomes the resistance and now you all know what is Psychological Resistance.

Technical Market Analytic Resistance

Hmm, this is what every trader knows because, in the market analysis, the first thing a trader analyzes is the market trend and its support and resistance levels. Technical market analytic resistance is basically the resistance that we analyze on the basis of markets' previous trends and behaviors. i.e.: As the market is $30k now we will create a trend line and we will try to figure out how many times from this range the market got rejection while making a breakthrough if we found the relevant market behavior we consider it as the resistance level in our technical analysis. The strength of any resistance range depends on the historical similarities if there are few similar trends in market behavior than the resistance level is weak and vice versa.

So this is the whole story in short with the technical analytic resistance there are a few sub-types of the resistance level depending on the type of analysis and indicator we are using so I will not boor you with the theory stuff the names are given below for better understanding I am going to add the Charts from where you can better understand their concepts and working.

⚫ Trendline resistance

⚫ MA resistance

⚫ Market Cyclic Behaviour resistance.

Note: So this was a basic overview of the resistance in the crypto market, the images taken from internet sources are given and the data explanation is on the basis of my knowledge base and experience, the wording is my own. You can visit my previous topics on the newbie guide for more interesting topics related information.

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[Faisal2202]

Tbh, i did not know there are so many types of resistances because all i read till now about crypto trading that there is resistance and then there is support level, didn't get to know about there types. And if resistance have these types and the support will also have some types. Looking forward to get there knowledge. But here you only explained two types with summary and three subtypes with only images.

I think it will be more easy for newbies to learn about sub types if you could also write some words on them. Plus from what i have observed there are not that big difference between psychological resistance and technical chart resistance. As in both, analysis only determine them when atleast two or more times these resistances have been tested.

[348Judah]

There are so many of them and some people also have taken their time in developing their own way of making this resistance through the speculations made on the chart flow on market price, we we are trading, we can come about new and different discovery on our own which could serve more better than the conventional trading patterns people often times use to deduct some analysis and make conclusions.

[tranthidung]

Resistances are not resistances forever. They will turn to supports when market breaks out and even can become new strong supports.

Resistances and supports are not only about price, trend line but about trading volume and break-outs, weak-downs are strongly correlated with trading volume. Those turning points will occur with big trading volume.

You can look at trading volume or better if you are affordable to use Trading View Premium account, you can use a better indicator, Volume Profile VPVR. Those peaks on VPVR will give you some lights on potential weak downs or break outs.

In some on-chain reports, you will see them as cohorts.

[Hamza2424]

There are so many of them and some people also have taken their time in developing their own way of making this resistance through the speculations made on the chart flow on market price, we we are trading, we can come about new and different discovery on our own which could serve more better than the conventional trading patterns people often times use to deduct some analysis and make conclusions.

Hmm about the discovery for which you talking, in my view it is called strategy and management. No one can better manage your funds for you but you can be the best because you already know about your trading sentiments, you know how much time you spend reading the market, and you know your limits. But the management and Strategy which we create while trading are the product of conventional trading patterns and learnings.

Resistances are not resistances forever. They will turn to supports when market breaks out and even can become new strong supports.

Hmm while the market is testing the breakthrough to gain value from a point its resistance and while the market is trying to hold the value it's called support. (For those who are reading the whole thread because it can give you the idea about which thing senior is talking about, in a more clear manner).

[jeraldskie11]

There are so many of them and some people also have taken their time in developing their own way of making this resistance through the speculations made on the chart flow on market price, we we are trading, we can come about new and different discovery on our own which could serve more better than the conventional trading patterns people often times use to deduct some analysis and make conclusions.

Even though pattern trading is common, it is still effective. There are many profitable traders out there using that strategy, and I believe in them because when I look at a chart, I see some patterns before an impulsive move occurs. I believe we should collect more data with it through backtesting and have other confluences to increase the probability of the trade. I tried multiple strategies, but none had a higher than 80% win rate. That is why, regardless of strategy, you must understand risk management because it is one of the keys to success.

[Hamza2424]

Even though pattern trading is common, it is still effective. There are many profitable traders out there using that strategy, and I believe in them because when I look at a chart, I see some patterns before an impulsive move occurs. I believe we should collect more data with it through backtesting and have other confluences to increase the probability of the trade. I tried multiple strategies, but none had a higher than 80% win rate. That is why, regardless of strategy, you must understand risk management because it is one of the keys to success.

Even if it's 80% consider yourself Lucky because achieving higher efficiency in speculation is a very rare case. In my own experience as a trainee except for particular market scenarios trade speculation never goes above 55 % to 65%. According to your speculation efficiency, it seems that you are quite active in the market view. Anyway, if the discussion is ongoing about trade efficiency and speculation perfection I have some tips for my dear ones.

⚫ Learn from the Past.
⚫ Make sure to put equipment focus on FA & TA both are important.
⚫ Never Challenge the sentimental rules.
⚫ Use a diverse strategy.
⚫ Keep Records and Analyze them.
⚫ Make sure the position sizing.

[Oshosondy]

Knowing the resistance and the support prices can help a trader to know when to enter a market or to leave a market after making profit. But we should take note that the market support and resistance price can be broken at anytime, this can result to a trader not gaining as it should have gained and sometimes lead to losses.

It is good for traders to learn and know what support and resistance are so that they can be able to determine the present support and resistance price of a coin, like bitcoin. But other trading strategies must be applied which will make trading to be profitable and also in a way to reduce loss if the market go against your position.

[Hamza2424]

Bumping an old topic, according to the market's current scenario, I'm sure seniors can help newbies understand the current market resistance levels and guide them with some tips to handle trade. Resistance and support levels are the basic and core concepts every trader and investor should understand.

Let's see, is it worth not bumping and old topic as far as I know there were 4 or 5 topics regarding a basic concept of trading for newbies created by myself. (I'm bad at English still, its enough to convey the message.)