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In the trading field, we often overlook a crucial technical indicator: time. Although this indicator is not often mentioned, it plays an important role in capturing the main rise.
The importance of time factors in cryptocurrency trading cannot be ignored. When we analyze the trend of a cryptocurrency, we should not only pay attention to the price trend but also consider the time it takes to reach a certain price level. This time dimension can provide us with a lot of valuable information.
Let's look at a typical scenario: a cryptocurrency rises from a low point to a previous high, then pulls back and attempts to break through again. If the time spent in consolidation or oscillation before breaking the previous high is relatively long, it usually indicates significant divergence in the market at that position, with heavy trapped positions and selling pressure. In this case, breaking through resistance will be more challenging, and the main rise will be harder to form.
On the contrary, if the oscillation period before the breakout is short, such as only 3 to 5 trading days, it indicates that the market has shown almost no hesitation, and the resistance at the previous high position is relatively small. Once the breakout occurs, the upward momentum may be exceptionally strong.
We can understand this phenomenon through practical examples. The SPK in July, BIO in August, and the recent surge of MYX all had very short consolidation periods before breaking through their previous highs, with only a few candlesticks. Therefore, once they broke through, they quickly entered an accelerated rising phase, forming a clear main rise.
However, not all cryptocurrencies follow this pattern. For example, OL started calculating from the previous high of 0.05529, and it took 34 trading days of fluctuation before challenging this level again. Such a long time span means that the resistance to break through will be very significant, and it may not be suitable to rashly attempt a breakthrough in the short term.
Of course, a long period of consolidation does not mean that there are absolutely no opportunities. Currencies like NMR and SOON, despite the gaps lasting a long time, eventually experienced a main rise. However, compared to short-term breakout situations, the probability of a main rise occurring in this case is relatively low.
Overall, the shorter the time (i.e., the number of K-lines) in the gap, the less resistance encountered during the breakout, and the higher the likelihood of a main rise occurring. Although this method cannot guarantee 100% accuracy, it indeed holds significant value as a reference indicator in terms of time dimension for selecting coins and assessing the success rate of breakouts.
In actual trading, we should not view any single indicator in isolation. Combining the time factor with other technical analysis tools can help us assess market conditions more comprehensively and make more informed trading decisions. At the same time, it is also important to remember that every trade carries risk, and a reasonable risk management strategy is equally important.