Session #2: Technical Analysis

Nov 27, 2025

1. Reading Trends

We began by reviewing what trends are and how to read them on a chart.

  • Uptrend: higher highs and higher lows

  • Downtrend: lower highs and lower lows

  • Price can move up and down inside the trend, but the overall structure defines the direction.

Example:
 BTC in March–September 2024 had a local downtrend inside a larger uptrend.
 As long as the major higher low is not broken, the macro uptrend remains intact.

  1. Trend Shifts

A trend shift happens when price breaks the structure:

  • An uptrend breaks when a lower low forms.

  • A downtrend breaks when a higher high forms.

  1. Support and Resistance (Trend Lines)

When connecting the highs in an uptrend, we get a resistance line, where price usually struggles and sellers enter.

  • Drawing on the wicks often gives more accuracy (as Oskar mentioned).

  • When price breaks the resistance line, it may come back for a retest.

  • If that retest holds, the old resistance becomes new support, which is then bullish.

Support is where buyers typically enter and price bounces.

Support/resistance levels are often based on previous highs or lows.

Where is the next resistance after a breakout?
 Look left on the chart → earlier highs.
 Investors sold at those highs before, and many who bought high might sell again when they finally reach break-even.
 Example: When approaching an old ATH, price often struggles because many sell there.

  1. Horizontal vs Diagonal Lines
  • Horizontal lines: based on actual price levels (previous highs/lows).

  • Diagonal trend lines: more psychological, they work because many traders watch them.

The horizontal lines are important to watch for breakout and the diagonal trend lines adds confluence and is often used in chart patterns.

They are more psychological while the horizontal lines are based on actual selling pressure. 

Old support/resistance that gets broken often flips and becomes the opposite. So an old support line that breaks will turn into a resistance line.

 

  1. How to Find a Good Trendline

A good trendline should have:

  • Minimum 2 touches

  • Ideally 3 touches

Trendlines often break around touch 4–5.
 The more times price touches the line, the higher the chance it eventually breaks.

 

  1. Liquidity Sweeps

Markets seek liquidity, areas where many stop-losses are placed.

Because many traders draw the same trendlines, they often place stops directly below support or above resistance.
 The market may sweep below support (or above resistance) before making the real move.

A better stop-loss placement is:

  • Below the previous higher low in an uptrend

  • Above the previous lower high in a downtrend

A break of these levels actually breaks the trend itself.

 

  1. Timeframes (Weekly, Daily, Lower)

Which timeframe to use depends on your goals:

  • Weekly timeframe:

    • Stronger and safer signals

    • Better for identifying macro trends

    • Targets can take months to reach

  • Daily timeframe:

    • Used to find smaller moves inside the macro trend

    • Targets may take days–weeks

  • Lower timeframes (minutes):

    • Much weaker levels

    • Easy to invalidate

    • More noise
    • But take less time to play out

Momentum and trend reliability increase on higher timeframes.

 

  1. Example: ETH vs BTC (From the task)

Oskar showed how ETH formed a bottom in USD, but ETH/BTC did not bottom at the same time.
 It took years before ETH started outperforming BTC again.

This showed that during that period, holding BTC was better than holding ETH.

This will help us choose what investment is best, if $ETH/BTC starts an uptrend then switching you $BTC into $ETH can be a smart move as $ETH will likely outperform $BTC. (And the opposite effect)

 

  1. Retest

A retest happens when price breaks a trendline or level and then returns to test it.

If the retest holds, it confirms the break and strengthens the new trend direction.

 

  1. Where to find liquidity, Using “Coinglass”

To find where liquidity is located, Louis uses the “Coinglass Liquidation Heatmap”.

Link: https://www.coinglass.com/pro/futures/LiquidationHeatMap?coin=BTC

How to use it:

  1. Open the Liquidation Heatmap.

  2. Choose the exchange (default: Binance).

  3. Choose your coin (BTC, ETH, XRP, etc.).

  4. Choose timeframe:

    • Lower timeframes → short-term moves

    • Higher timeframes → bigger moves

  5. Bright colors = high liquidity
     (lots of stop-losses and liquidation orders)

Price often gravitates toward these bright zones. If this matches with a breakout or other factors then we have a strong case. 

 

I think that's all, if you have any questions feel free to ask them or send a message privately to Louis.

 

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