THE SUPPORT LEVELS IN CRYPTOCURRENCY TRADING CHART

Hello to you all in this great community and in this great platform today. I greet you all in good spirit and I want to believe that we all are doing just great today and if so we give God the praise for the sustenance of life and good health.

Today I am here among you all to discuss about an important topic regarding trading and I have titled today the support and resistance levels in cryptocurrency trading chart. This is indeed a vital topic that most traders especially new beings are expected to be familiar with when trading cryptocurrency in the cryptocurrency market.

It is expedient that as a trader who wants to begin cryptocurrency market trading to know the meaning of the various levels in the cryptocurrency market trading chart as though this will give one an insight on how the price value of an asset rises and falls in the cryptocurrency market as a result of traders activities. So sit tight and stay calm as I begin the teaching for today.

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We all know that cryptocurrency trading is quite different from the normal business trading we perform in our everyday life. The crypto space is quite different and as such there are criteria one has to follow to minimize losses else there would be consequences such as kissing funds and asset in the cryptocurrency market when making a trade.

As we notice that cryptocurrency prices are unstable as such it is highly volatile and this is how trading came into existence. When a trader notice a rise in cryptocurrency price, he or she execute a buy trade order to take advantage of the market and when there is a fall in price, a sell trade is being executed.

Now in cryptocurrency trading, there are levels and this levels are determined by the volume of which the trade is being executed. We have the support and resistance levels in the cryptocurrency market trading. This levels has a specific functions they carry out and I will be talking about them one after another.

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THE SUPPORT LEVELS

The support levels are levels by which we notice during trading where price cease to go below the last lower low. This happens when there is a buy entry trade by most traders especially strong hands in the cryptocurrency market.

When the price value of an asset is seen in a downtrend for sometime, eventually we get to see that the price does not go further below the previous lows and when that happens it means that traders are now purchasing the asset and hence the point at which the price refuses to go down further is regarded as the support level.

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The support levels is as a result of individuals purchasing a particular asset that was going down in price value in the market and hence the downtrend movement retrace immediately back to an uptrend movement and as such the price of the asset begins to increase in value as more traders and investors purchase the particular asset in the cryptocurrency market.

Depending on the number of support levels, we can see as many support level as possible. The reason for more support levels is because at the first level there might be other traders who still want to sell off the cryptocurrency and as such the price may take a turnaround back to a downtrend movement but it won't get to the previous support level.

As it God's down, immediately there comes a strong purchasing power by other traders which will eventually retrace the movement of the asset price back to an uptrend movement. That point where it goes back to an uptrend movement is called the second support level. That is how it will continue until the movement remains on an uptrend manner or a huge sell comes to pull down the price below the initial support level.

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The support levels are use to determine how long a particular asset price and remain on an uptrend movement and we all know that if a particular asset price rises above there is every tendency that the price may like return to where it was and that is why the support levels helps us to see what has happened in the market and how high has the price gone and the possible positions we can set our entry and exit point.

Now let's talk about the strong and weak support levels for more understanding.

STRONG SUPPORT LEVELS

The strong support levels are levels that are seen in high volume. It is a level whereby the strong purchase of a particular asset tends to resist the continuous fall of the price value of the said asset. This helps to stop the decline in asset price value as it gets the said point. When this happens it implies that the purchasing power of the said asset is far strong and the selling power of that same asset.

This means that the volume at which the asset is sold is lesser than the volume at which the asset is later purchased during the fall in price at that particular point in time. In other words, this means that the number of traders purchasing the cryptocurrency asset at that particular point in time is greater than the number of traders selling off the asset in the market trading.

When this happens, the asset price tends to increase in price value as we get to see higher purchasing power in volume and as the purchasing power increase, the price of the asset increases too.

SUPPORT WEAK LEVELS

Here the level of support is not as solid as the strong level. This can be seen when a cryptocurrency price declined and suddenly we get to see a little rise in price above the previous lows and in a moment, the price falls back to a lower low that is more lower than the low it was previously.

When that happens it means that the support level that was seen is weak and have less volume. This is because the purchasing power is weak and it is as a result of less traders purchasing the said asset at that particular point in time. This implies that the traders selling of that asset are stronger or have more volume than the traders purchasing the asset at that particular time.

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CONCLUSION

Support levels are levels that helps to stabilize price from further decline. It tends to stop the continuous fall in asset price and hence retrace the asset price back to an uptrend movement and as such, we get to see an increase in price value of the said asset.

The support levels are use to know how well an asset price has gone up in the cryptocurrency market trading and traders make use of this to know where the asset value is coming from and what is likely to happen to the price of the asset with a particular time-frame. It is also use to predict their entry and exit positions when making a trade in the cryptocurrency market trading.

Thank you all for reading from me today. I will see you soon