Forward the Original Title‘赚钱之前需要了解的一些基础指标’

In fact, we have previously covered some aspects of technical analysis, but they were scattered across different articles. We haven’t compiled a systematic and complete tutorial (nor do we have plans to do so). However, considering the confusion some of our friends have in this area, today we will provide a simple overview of technical analysis. We will list some commonly used basic indicators, hoping that you can expand on these basics and use Google to further your understanding.

1.Support/Rresistance Level

Prices are mainly driven by demand. As market demand concentrates, a downtrend might stabilize at a relative position. If the price repeatedly rebounds from a certain level, we can consider this level as a support level. Generally, if you are swing trading, you might consider buying when the price approaches the support level, as shown in the figure below.

Conversely, in an uptrend, the price will attempt to find a new high. If the price repeatedly reaches a certain level but fails to break through, this level is considered a resistance level. Generally, if you are swing trading, you might consider selling when the price approaches the resistance level.

Support and resistance levels are relative. Sometimes, a resistance level, once effectively broken, can become a new support level. Similarly, a support level, once broken, can become a new resistance level, as shown in the figure below.

In the actual chart, what we see more likely is a box or flag pattern composed of support/resistance levels. As shown below.

Here we take SOL as an example to make a simple demonstration, as shown in the figure below.

Based on different patterns, we can determine the corresponding trends, including upward trends, downward trends, and sideways consolidation (no trend state). As shown below.

2. Common patterns

From support and resistance levels, beyond box patterns and flag patterns, we can also develop various other patterns, as shown in the figure below.

Here, we’ll take a few patterns from the above figures to explain further:

Head and Shoulders Top: The formation of the two shoulders should be symmetrical. The target price is the vertical distance from the head to the neckline BD. The downward target from point F should be ≥CN, as shown in the figure below.

Head and Shoulders Bottom: The time duration of the two shoulders should be approximately equal. When the price breaks above the neckline, the upward distance should be ≥CN, as shown in the figure below.

Double Top (also called M Top): Points A and C are at the same level. Draw a parallel line through point B parallel to line AC; this is called the neckline. When the price breaks the neckline, a downtrend forms with a downward target distance of FB, as shown in the figure below.

Double Bottom (also called W Bottom): Points A and C are at the same level. Draw a parallel line through point B parallel to line AC; this is called the neckline. When the price breaks the neckline, an uptrend forms with an upward target distance of FB, as shown in the figure below.

Ascending Triangle: Occurs in an uptrend, with the upward target being the width of the triangle, as shown in the figure below.

Descending Triangle: Occurs in a downtrend, with the downward target being the width of the triangle, as shown in the figure below.

For more patterns, you can search for the corresponding names on Google to find more detailed information. Overall, understanding these basic patterns will enable you to read candlestick charts.

3. Common indicators

In addition to various candlestick patterns in the charts, there are many auxiliary indicators that are very helpful for analyzing trends, identifying entry and exit points, and gauging market sentiment during trading. They provide objective data to reduce emotional trading and improve the accuracy of price predictions, as shown in the figure below.

Here, we list a few commonly used chart indicators:

RSI (Relative Strength Index): This indicator is mainly used to measure the speed and change of price movements. Typically, an RSI above 70 indicates overbought conditions (potential sell), while an RSI below 30 indicates oversold conditions (potential buy), as shown in the figure below.

MA (Moving Average): This is a trend-following indicator that smooths price data, commonly using 50-day (short-term) and 200-day (long-term) MAs. A bullish signal occurs when the short-term MA crosses above the long-term MA, while a bearish signal occurs when the short-term MA crosses below the long-term MA, as shown in the figure below.

BOLL (Bollinger Bands): This indicator provides insights into volatility to identify overbought or oversold conditions. If the price touches the lower band, it indicates a potential buy. If the price touches the upper band, it indicates a potential sell, as shown in the figure below.

For more chart indicators, you can search for the corresponding names on TradingView to find detailed information.

Additionally, candlestick charts are analyzed over multiple time frames. For example, if you prefer to trade multiple times within a day, you might consider looking at short-term charts (such as 5-minute or 15-minute charts). If you trade less frequently, you can consider looking at 4-hour or daily charts.

In summary, if you like to swing trade, the above technical indicators might be quite helpful. When executing trades, it is recommended to set stop-loss and take-profit levels, such as setting a stop-loss target below the buy support level and avoiding excessive greed.

However, if you are a long-term investor, I would recommend that you pay less attention to candlestick charts and instead refer to long-term indicators such as AHR999, the Rainbow Price Chart, or the MVRV Z-Score for your operations, as shown in the figure below.

At the end of this article, let’s take a look at some noteworthy news from the past few days:

July 3: It was reported that Bittensor was hacked, causing on-chain transactions to halt. As a result of this incident, the price of the TAO token also experienced a significant short-term drop, as shown in the figure below.

July 2: Circle received the first EU MiCA license, becoming the world’s first stablecoin issuer to comply with MiCA regulations. This means the company’s USD stablecoin (USDC) and EUR stablecoin (EURC) now comply with the EU’s new stablecoin regulations under MiCA. MiCA is the EU’s and the world’s first cryptocurrency regulatory mechanism, as shown in the figure below.

July 1: Data showed that Polkadot spent 11 million DOT (worth $86 million) in the past six months, with $37 million spent on promotion (advertising or paying influencers). However, Polkadot seems to have garnered little attention on X and other platforms. Currently, Polkadot controls assets worth $245 million (38 million DOT) across three different chains, of which $188 million (29 million DOT) are liquid assets. Some netizens calculated that at Polkadot’s current burn rate, it would go bankrupt in less than two years, as shown in the figure below.

July 1: Amber Japan officially renamed itself to S.BLOX, indicating that Sony plans to relaunch Whalefin and will launch a cryptocurrency exchange in Japan. Sony’s Quetta Web acquired Amber Japan (Whalefin) in August 2023, as shown in the figure below.

July 1: According to monitoring data from Lookonchain, the German government transferred 1,500 Bitcoin (BTC) (about $95 million) and still holds 44,692 Bitcoin, as shown in the figure below.

July 1: Gemini (a digital asset trading and custody service company) signed a 5-year Bitcoin sponsorship deal with Peter McCormack’s football club, as shown in the figure below.

Disclaimer：

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