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In the trading field, many investors often focus their attention on technical indicators such as MACD and RSI, while neglecting an equally important signal - time. This indicator has unique value in predicting the main rise.
When a cryptocurrency rises from a low point to a previous high point, after experiencing a pullback and attempting to surge again, the key to breaking through the previous consolidation area lies in observing the number of fluctuations on the daily candlestick chart. This period, known as the "gap period," has a significant impact on the subsequent market trend.
If the number of K-lines during the gap period is relatively small, usually between 3-5, it means that the market has not stayed at that price level for a long time, and the trapped positions and selling pressure are relatively light. In this case, once a breakout occurs, it is likely to trigger a strong upward trend, namely the main rise. Recently, cryptocurrencies such as SPK, BIO, and MYX in the market have shown this characteristic.
On the contrary, if there are many K-lines during the gap period, for example, 34 K-lines for the OL currency, it indicates that a large number of trapped positions have accumulated at this price level, resulting in heavy selling pressure. In this case, it is difficult to break through the resistance, making it challenging to form a main rise market.
Although there are cases like NMR and SOON that can rise after a long period of oscillation, the probability of this situation is relatively low, and the uncertainty is high, making it unsuitable as a primary reference.
In summary, the fewer the number of K-lines during a gap period, the smaller the resistance for a breakout, and the greater the possibility of forming a main rise. Although this time indicator is not an absolutely accurate rule, it can help investors better filter potential targets and improve the accuracy of their judgments regarding market breakouts.
In the current market environment, as expectations for a Federal Reserve interest rate cut heat up, the cryptocurrency market is showing signs of rebound. Some investors believe that the "altcoin season" may be approaching. However, regardless of how the market changes, using analysis tools such as time indicators remains an effective method for improving the quality of investment decisions.