$ETH Breakthrough opportunities should not be missed: judge the trend of cryptocurrencies from volume, price, time, and space.
If you also want to treat trading cryptocurrencies as a second profession, or even to support your family, I want to share an important technical point with you: how to determine whether a cryptocurrency has formed a breakthrough?
In fact, it can be comprehensively judged from four aspects: volume, price, time, and space:
1. Volume: Before the troops move, the supplies must arrive first
$SOL In the early stages of trend formation, increased volume is indispensable.
Especially the first increase in volume after a long period of sideways movement, this is when special attention is needed.
However, it should be noted that an increase in volume is not the best entry point; usually, there will be a trial market pullback after the increase in volume. After the main force has completed the washout, the second increase in volume leads to a rise, which is where our true opportunity lies.
In other words, the first round of increased volume is just a signal; the real breakthrough often occurs during the second confirmation of volume after the washout.
2. Price: The closing price is key
To determine whether a breakthrough is real, the most important indicator is the closing price.
There may be many fluctuations during the process, but only when the closing price can firmly stand above the resistance level does it mean that the main force has truly begun to exert strength.
This is also the key to distinguishing between true and false breakthroughs.
If the closing price can consistently remain above the resistance level, the likelihood of a breakthrough greatly increases.
Conversely, if the closing price fails to break through, it is often a false breakthrough, and one should not blindly follow the trend.
3. Time: Long duration and concentrated chips
Before a breakthrough occurs, the cryptocurrency price must undergo a period of sideways consolidation, preferably with low volume for more than 3 months.
During this period, the concentration of chips should be below 10%.
Why is this so important?
Because only when the main force accumulates enough chips can it provide sufficient explosive power for subsequent rises.
Once this type of cryptocurrency breaks through, it usually has very strong upward momentum.
4. Space: Identify key resistance levels
Before every breakthrough, key resistance levels are very important. You need to clearly identify these positions, which may include:
The previous volume adjustment's starting and ending points; the necklines of W bottoms or head and shoulders bottoms; or the integer thresholds of the cryptocurrency price.
Once the cryptocurrency price breaks through these resistance levels, the potential for price increase can be predicted, and this breakthrough can be considered a "real" breakthrough, making the operational opportunities clearer.
