Trendlines: The Quick Guide to Not Losing Money in Crypto

We all talk about trend lines, but how many actually know how to draw them without messing up? Here goes the reality.

The Concept in 10 Seconds

A trend line is basically connecting low points ( if it rises ) or high points ( if it falls ) on the chart. That's it. The line tells you where the price is likely headed.

• Bullish trend: Higher lows → draws an upward-sloping line
• Bearish trend: Lower highs → draw a downward sloping line

How to Draw It Without Looking Like a Rookie

The basics:

1. You need at least 2-3 points that touch the line
2. The more times the price bounces off it, the stronger it is.
3. Extend the line forward to see where it will bounce after.

Real example: BTC is rising. You connect its lows from the last week with an upward line. Every time it drops to that line, it bounces back. That means the line is decent support.

What Is ( ForThe Uses That Matter)

1. Know Where to Enter and Exit

• Buy: In an uptrend, wait for the price to drop to the line and bounce back.
• Sale: In a downtrend, sell when it rises to touch the line

2. Detect Reversals ( The Surprises )

When the price breaks the line strongly, the trend is likely to change:

• If BTC was dropping (downward line) and suddenly rises above the line → bullish reversal
• If ETH rises (uptrend) and falls below → bearish reversal

Short Term vs. Long Term

30 min/1h charts: Useful for day trading, but they are noisier. Daily/weekly charts: More reliable for macro trends

Mix both: a line on the daily chart gives you overall context, while one on the 1h chart helps with timing.

The Combo That Works

Trend lines alone can be misleading. Combine them with:

• RSI: If the price touches the line and the RSI is in oversold → probable rebound
• Volume: A line break with high volume = real reversal, not fake out
• Moving averages (50/200): If the line aligns with the MA, it is stronger.

The Mistakes You CANNOT Make

1. Force lines where there are none: If the price does not follow a clear pattern, it's better to wait.
2. Ignore timeframes: A 1h line says something different than a 4h line.
3. Trust 100% in the line alone: Always seek confirmation with another indicator

Book Example (Really)

You see that BTC is on a bullish rally. You draw the support line with the last 5 bounces. The price drops to touch it again, and at that point:

• The volume remains normal
• The RSI is not in extreme oversold territory
• But a 200 moving average is right in that zone

Then you go long. BTC rebounds, you go up 3-5%.

But if BTC suddenly breaks below with +50% volume, that's a warning that the trend has broken. Better to exit or go short.

What You Need to Remember

Trend lines do not predict the future, but they give you probabilities. Use 3-4 bounces on the line as validation. Combine with other indicators. Respect the timeframes. And practice with a demo account first, don't be one of those who learns with real money.

The trend is your friend until it isn't.