I’ve discovered a very interesting phenomenon: less than 10% of retail investors can accurately catch the bottom, and the key difference lies in whether they know how to identify support and resistance levels.

I’ve also been observing this issue recently. Many people buy coins purely based on intuition, resulting in being trapped at high prices or selling at the floor. The traders who actually make money, their secret is quite simple—they know how to draw support lines.

Let’s start with the basics. When the price drops to a certain level, buyers feel it’s profitable and rush in to buy, causing the price to stop falling or even rebound. Drawing a line at this point is called support. Conversely, the opposite logic applies: when the price rises to a certain point and encounters selling pressure, it falls back, which is resistance. Support and resistance are actually concrete reflections of market psychology.

How to draw them accurately? I’ll use BTC as an example. First, find the previous low, then find a second low close to the same level, and connect these two points. The key is to wait for the third dip back to this line and then rebound; only then can it be confirmed as true support. After that, every time the price returns near this line, it’s a potential buy point.

But there’s a detail many people overlook. Support and resistance levels are not fixed; they change roles as the market evolves. Sometimes yesterday’s support becomes today’s resistance, and vice versa. So, you can’t stick rigidly to one position.

In practical trading, I find the most effective method is to combine multiple factors. Previous highs and lows, key round numbers, moving averages, and dense clusters of order chips—all these can help confirm support and resistance levels. Especially areas with high trading volume, which often form strong support.

Also, pay attention to trading volume and market sentiment. Sometimes the price hits a support level but with insufficient volume; this support is actually weak and easy to break. Conversely, support with strong volume is genuine support.

Honestly, mastering the judgment of support and resistance is crucial for risk management. Buying near support levels and considering reducing positions near resistance levels can significantly improve your win rate. But the prerequisite is continuous practice and summarization—just relying on theory is useless.

Recently, I’ve also been monitoring some related assets’ support and resistance levels on Gate.io, and I feel that this rebound has some positions worth paying attention to. If you’re interested, you can check the market yourself.