How to Use Support & Resistance to Trade Bitcoin

In past trade examples, we saw support and resistance that held firm. They stayed strong and did not break.

However, sometimes support & resistances levels are not strong enough to stop movement of the bitcoin price moving in a certain direction. When bitcoin price moves past these support & resistance levels we say that these technical levels have been broken. That is why we always use a stoploss order when trading these technical levels, just in case they don't hold.

But what happens when these areas are broken, well these levels change from one to the other, for example

When a support level is broken it becomes a resistance

When a resistance level is broken it becomes a support

Using charts, the examples below show an illustration of what happens when these levels break:

Support level is broken it becomes a resistance

In the crypto example illustrated below, the support which had been tested 2 times could not hold the third time, the sellers were able to push the bitcoin price downward beyond/past this technical level.

But, the bitcoin price went back up, but this time it couldn't get past a certain line. After that, sellers quickly pushed the bitcoin price back down. This happened because the line that used to be support had now become resistance.

In bitcoin trading when a support is taken out, the stop losses placed below that point are also taken out, thus decreasing the force that the buyers(bulls) had. This give sellers an opportunity to short sell bitcoin & place their stops just above this level which now turns into a resistance level.

BTCUSD Charts Support Resistance Zones

Resistance level is broken it turns into a support

In the crypto example illustrated below using the chart, the resistance level that had been tested 2 times could not hold the third time, the bulls were able to push the bitcoin price upward beyond/past this technical level.

When the bitcoin price tried to go down again it couldn't move lower than this technical level. The bitcoin price was there after quickly pushed further upwards by the buyers. This was because the line that was a resistance had now turned in to a support. This is what happens in bitcoin trading, when a resistance area is broken it turn into a support level.

Resistance is broken it becomes a support - Charts Support Resistance Zones

Traders who have closed their short cryptocurrency positions will now likely initiate long trades, positioning their stop losses just underneath this technical threshold.

Major and Minor Resistance Zones

On charts, the areas where the price struggles to go higher or lower are either strong or weak resistance or support areas.

Major Resistance/Support levels

In Major Resistance/Support levels bitcoin price will stay at this level for some time, either the bitcoin price will consolidate at this point or form a rectangle cryptocurrency chart pattern when bitcoin price gets to this point. This price level will be tested several times before it is either broken or it holds and bitcoin price doesn't get to go past this support/resistance area.

The above example are good examples of major Resistance and Support Areas.

Minor Resistance/Support levels

At minor resistance and support levels, BTCUSD often forms these points pretty quickly, then moves past them just as fast.

Upward Crypto Trend: The pattern setup of this minor resistance & support points will form a series of areas whose general direction is upwards. Upward Bitcoin Trend Series of Support & Resistance Levels - BTCUSD Charts Support & Resistance Levels

Upward Bitcoin Trend Series of Support & Resistance

Downward Bitcoin Trend: Small support and resistance spots create a pattern that trends lower overall.

Downwards Bitcoin Trend Series of Support & Resistance Levels - How to Trade BTCUSD Support & Resistance Levels

Down-ward Bitcoin Trend Series of Support & Resistance

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