I just re-engaged with trend analysis and keep realizing how crucial it is to truly understand this stuff. The crypto market follows trends — and when one is forming, it usually stays in that direction. The problem: most people don’t recognize early enough whether we’re currently in a bullish or bearish trend or if everything is just reversing.

When I look for trends, I always start with the larger timeframes. No matter what happens on the 4-hour chart — ultimately, it follows the direction of the weekly chart. That’s the trick: you use the smaller timeframes for your setup, but the larger timeframes give you the orientation. Weekly and daily charts are ideal for this.

A bullish trend looks pretty simple: the price makes consistently higher highs and higher lows. That’s your confirmation. If the price doesn’t fall below any of the previous lows, the uptrend remains intact. Period. But here’s the tricky part: nothing moves straight up. On smaller timeframes, you see setbacks; on larger ones, only consolidation. I’ve experienced 32% pullbacks that looked like a harmless sideways move on the weekly chart.

Where do you enter? When the price falls into the key zone — meaning the previous higher low of the larger timeframe — that can be your entry point. The target: new highs.

For a bearish trend, it’s the mirror image: lower highs and lower lows. That’s the warning sign that we’re in a downtrend. If you want to short, you use the same method. The smaller timeframe gives you the trigger when the price jumps into the upper high zone of the larger timeframe. Your target then is new lows.

But here’s where most lose their money: trend reversals. No trend lasts forever. And that’s where emotions come into play. When people are pessimistic and the trend turns bullish, they can’t accept it — they keep shorting. Conversely: the market turns bearish, and everyone who was bullish can let go and still buy.

How do you recognize a trend reversal? Very simply — with the same strategy you use for bullish and bearish trends. When an uptrend breaks, the price falls below the higher low. That’s your signal: trend change. Some take profits there; others open short positions — depends on how you tick.

Conversely: when the price breaks through the lower highs of the bearish trend, the market shifts from bearish to bullish. That’s the confirmation.

The reality is: Be bullish when the trend is bullish. Be bearish when the trend is bearish. And change your opinion when the trend changes. That’s the only way to survive long-term and trade successfully. No ego games, no emotional decisions — just pure trend following.