How to Use Support & Resistance to Trade Bitcoin

In the above previous course trades examples we have looked at support & resistance areas that weren't broken. These points held because they were strong enough.

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.

However, the bitcoin price bounced back up again, but this time the bitcoin price could not go up beyond this line. The bitcoin price was there after quickly pushed down by the sellers(bears). This was because the line that was a support had now turned in to a 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 had closed their short sell cryptocurrency trades will now open long trades & place their stop losses just below this technical level.

Major and Minor Resistance Zones

In charts the resistance & support zones formed are either major resistance or support levels or minor resistance/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

In minor resistance & support levels the btcusd crypto price will form these points quickly in the shortterm and then quickly moves past these resistance levels and support regions.

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

Down-ward Bitcoin Trend: The pattern formation of this minor resistance and support points will form a series of areas whose general direction is downward.

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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