Identifying Key Levels | Crypto Trading Guide for Beginners

Boys welcome back to AlphaDrop my name is Ron I'm an analyst at BoxMining and in this video I will show you probably the most important skill for crypto trading and we're talking about identifying key levels the full article is on box mining.com I wrote this word-for-word and with a lot of care there's a lot of details here to go over that's why I'm also making this video to explain my thought process so that you guys understand this fully this is a very important skill set to have as this actually served as a foundation for me to make $11,000 from just $1,000 in five months and also this will be a master class series of crypto trading for complete beginners this video is just part one we will explain key levels then in part two we will cover risk management and psychology part three we will cover confirmation versus deviation part four we will cover high time frame versus low time frame and part five we will cover entry models all of these concepts and strategies combined are very important to consider before you take a trade I always consider all five of these before I take a trade and do not let anyone tell you different because technical analysis definitely works the people that say they did not work either are not traders themselves they don't understand or they just don't want you to become better traders all right they're gonna they're going like oh it only comes down to supply and demand well supply and demand can be found on the charts it's a way for traders to find fair value and market equilibrium which is pretty much the basics of economics right and if you think about it there's no industry in the world that has that much amount of historical data for you to read it's all out in the public it's your job as a trader to interpret them and then react accordingly that is your sole job as a crypto trader so I really hope that you guys find these videos helpful feel free to always come back and watch if you don't understand and leave a comment down below if you have any other questions that have not been covered in these videos so without further ado let's dive straight in alright let's start off by defining what are key levels what are they so key levels are specific price points on a chart where the market tends to react either by reversing consolidating or breaking out and there are four types of key levels technical key levels weekly levels psychological levels and event based levels in this video we'll be focusing on technical key levels and weekly levels honestly these two types of key levels are really all you need because once you've mastered them you'll be able to draw them yourselves and find opportunities every single day in a market alright so let's start off with technical key levels how do we identify technical key levels you'll find them at price points where the market has shown significant reactions the keyword here is significant reactions so think of strong bounces rejections and breakouts we'll circle back to this okay and you'll start to see mmm it slowly makes sense reactions okay so technical three levels are made up of three main components range low range high and mid-range it'll look something like this so this is BTC on the daily time frame we have our range high at ninety five thousand fifty eight dollars mid-range at eighty seven thousand dollars and one hundred seventy eight and range low at seventy eight thousand two hundred and ten okay what makes a valid range low that would be the swing low where the price bounces strongly after a dump in our BTC example right here you can see price had consolidated above ninety thousand four several months right until late February a sharp drop happened over the next five days marking a new low on February 28th at seventy eight thousand at that point on we do not know yet that this is our range low until the next criteria is met what would that be looking at the definition is bounce strongly after a dump okay so you can see dump dump dump try to reclaim close green okay but the next day Dom okay then the next day strong bounce very big bounce strong recovery after the initial dump then that swing low would be marked as the range low so think of it like this it's almost always like a v-shape recovery where a sharp dump and then a strong bounce it can be this kind of bounce it can even be this kind of bounce it can even be equal level kind of bounce it does not matter as long as you have a sharp dump as the first move then a respectable pump after the move so this would be marked as your range low as seen here right so it's a very good practice to identify these on the high timeframe first if you're a beginner I suggest looking at the weekly then looking at the three day then looking at the daily and then once you start getting good at identifying these on the high timeframe you'll see even more opportunities in the lower timeframe even on the one hour even on the 15 minute even on the five minutes so we'll explain this in the next video when we cover high timeframe versus low timeframe right this will be part four so that is your range low and more often than not the pump after the range low would be marked as the range high so by definition this is the level where the price faces resistance often rejecting or breaking out after a rally so as you can see here one day two days after seventy eight thousand dollars was touched for BTC price went as high as ninety five thousand but failed to go further and what makes this an even stronger range high is that it nearly came back towards its initial dump on February 23 right which triggered the sharp dump in the first place but all you have to remember is that V shape recovery concept right whether the pump is strong after the dump whether the pump is equal levels after the dump or even weak after the dump but quite respectable right we know that these are our range low and these areas sequentially would be our range high okay so for in this instance it would be drawn out like this this area would be our range high because it failed to go further and you will often see this type of movement in the crypto market every single day now comes the mid-range so the thing about the mid-range is it is not necessarily the halfway point between the range low and range high so it's not as simple as taking the range high taking the range low and divide that by two and having the exact middle point as the mid-range that's not how you should approach it but rather you find areas where there is a lot of significant reactions right so we're circling back to that keyword significant reactions here in our current mid-range there is a lot of reactions going on for example rejection series of rejection another rejection reclaim retest and continuation breakout and now you're noticing that hey the mid-range isn't displaying the role of resistance during this entire period yes that is in fact correct to make things simple just know that the range low plays the role as the support right you want to see bounces off of the range low the range high plays the role of a resistance more often than not you will see rejections off of the range high that's the resistance and the mid-range is where it gets spicy okay it can play the role of both the support and resistance this area would be known as the SR flip region the support resistance level flip region okay it can play the role of both sides which is why price action is almost always volatile around this key level but you should not fear the mid-range because price is so volatile around that area it presents a lot of good trading opportunities especially paired with risk management now for beginners especially for me when I first started off learning about mapping out my mid-range it can get very very tricky okay the tricky thing about mid-range is that it can change as price action develops over time the longer price stalls inside our range there is a good chance that the mid-range can change bars and that all comes down to how much partying is going either in the lower side of the range or the higher side of the range so previously before we had this breakout right here our mid-range was in fact around this level right here okay marked by the yellow dotted line right here this was our mid-range before this breakout even happened so before April 21 this was the mid-range that we're playing why yet again we see the same series of significant reactions around that level during March 3 to March 8 this entire area right here it served as a support for price action then you had a complete break below failed to reclaim and it served as resistance during these times then you have a deviation here break below failed to reclaim rejection again another rejection come down retest the range low and yet again another series of rejections happening at that area and as we can see right after the breakout on April 21 and more importantly the strong continuation on April 22 so we're talking about these two candles right here were really big reactions those two candles specifically created an imbalance of liquidity created by the buyers on April 21 and 22 at some point in the future it is likely those areas will get filled which overlaps with the current mid-range white dotted line so you don't really need to learn about this in this video where we talk about liquidity imbalance this will be covered in I think part 5 entry models but for now we just stick to learning the key level itself so when you come across situations like this where you're able to identify more than one mid-range going on in your current range a smart thing to do is let me just delete these drawings first is you take both of those mid-ranges and you can draw a box right very very simple you draw a box drag it out and when it comes to your actual trade executions instead of timing for a perfect limit order either at your current mid range or at your previous mid range what you can do is you can simply DCA inside this box right that way you can see everything just becomes so much clearer so those are how you define range lows range highs and mid-range the most important principle and key takeaway here is remember the more reactions the key level have seen the more valid they are as a key level this can be applied to range high and range low but especially applied to mid ranges and you know my personal opinion is there's no right or wrong key levels don't be afraid to experiment there's only stronger key levels and weaker key levels that's that's basically what I think right if you think that way you'll have more confidence drawing out that way you don't doubt yourself when you chart out your key levels right practice them get better at it and eventually you can easily spot them with your eye you don't even need to draw lines on first glance now what happens if price breaks out of range and this is very applicable to ETH right for the longest time ever since January 2024 up until late February 2025 $2,100 has served as a very strong range low a very strong support for ETH every time price touch 2,100 in fact it touched there three times one here two here and three here it bounced very strongly but in early March we lost that level we completely broken below 2,100 and what ends up happening is that this yellow range right here where we have a range high mid range range low this is no longer in play now when you come upon situations like this you will need to go back in time to identify previous pivot points and establish new key levels so you can see you zoom out you can see whoa there's so much more historical data to work with and it would look something like this all right the the white ranges are now our new ranges so the $877 would be our new range low I know it sounds scary but bear with me here 2,155 would be the new mid range for ETH and $3,581 would be the new range high for ETH now why $877 as our range low because you can see right you can see price dumped all the way from 3,500 all the way down to 877 and then we had the strong bounce towards $2,000 remember this concept the V shape recovery all right so looking like this it looks like a weak pump but quite respectable so that would be marked as the range low and this would be our range high because remember what I told you range lows and range highs often work hand-in-hand in this case because we're going back previously we're taking this as our range high and not this one why because we have seen price action recently at $4,000 you can see this whole entire move got rejected and dumped down below so we also have to take this into consideration there is a possibility that this area can be retested again in the future technically you can also keep this yellow range high as the current range high there's certainly no problem with that right you can even draw a box like this so if you ever feel confused about which line to use you can just combine both and draw a box the reason why I want to be more precise with this white line being our range high because first and foremost right the range low and range high work hand-in-hand I like them to be as close as possible for it to work and also given the context of ETH its previous all-time high was at $4,800 and we had three previous attempts at $4,000 these are our new swing highs and this entire move is not just a deviation but rather is an entire swing failure pattern so we'll also explain swing failure pattern and confirmation versus deviation part three of the video so you don't have to worry about that when it comes to mapping out your key levels you just need to know pretty much this kind of pattern this shows up almost everywhere and crypto in every time frame okay so let's also take this time of what I'm thinking could play out for ETH so whenever we have our new range anything inside that range can be played so yes there is a potential that $877 at the range low could potentially be retested at some point in the future okay remember it's a probability it's not guaranteed it's just probability and the probability of the range low being revisited can be higher if we do not reclaim our current mid-range at $2,100 so if we come upon $2,100 like this but gets rejected right making series of lower low it can even spike to this high but fail to reclaim then yes eventually $877 could be targeted in the future otherwise if we have a successful reclaim of the mid-range right performing series of higher high and we can see multiple mini dumps but respect the $2,155 level then yes we are going to retest the range high at $3,500 that is how you play your range okay okay so that's all for technical key levels let's quickly move on to weekly levels this is going to be a short one because I primarily use weekly levels as a reference on top of my technical key levels I don't usually use weekly levels as a confirmation for my trade but rather as supporting data for my reasoning to take the trades so weekly session key levels are based on significant price points from the start and end of the trading week these levels reflect the opening and closing dynamics of traditional markets so stock market tradings are only open during the weekdays and not in the weekend so that would be Monday to Friday they're often respected in crypto trading as well yes this is true because recently right a lot of large institutional players even countries are looking to get involved in Bitcoin and ETH and if they're gonna be taking a position usually they take a position during the weekdays okay just like they would do in the traditional stock markets so your weekly key levels will be focusing on Monday highs Monday lows and Friday highs Friday lows there is also Tuesday highs and lows Wednesday highs and lows Thursday highs and lows you can use them as well into your strategy but myself I pretty much only use Monday highs Monday lows and Friday highs Friday lows because I want to see up how did price react literally from the opening and closing of that week they're excellent for short-term trades as well so if you're gonna be looking at the chart preferably you want to look at on the hourly time frame so for our maximum you can go to the one hour or even in the 15 minutes and the objective here is very simple after Monday you mark out the highs and the lows of that day key tip here is you set your time zone to UTC okay and generally what happens on Monday usually determines on how the market will behave for the rest of the week so if Monday's high gets taken out either on Tuesday or on Wednesday in this case Tuesday was pretty strong breakout it would look to retest previous week's high in this case that would be previous Friday high as you can see at the time of this recording we've broken above previous Friday high conversely if what happened on Tuesday were to break below Monday low then it would look to retest previous week's low in that case that would be previous Monday low at ninety two thousand so how I use weekly session key levels as a frame of reference on top of my technical key levels is pretty much confluence just for confidence to see if it's reacting the same way right now yes it does look bullish looks like yes we are breaking out of range high does this mean that this range is still in play that is where you will need to zoom out either on the daily to look for significant body closes above that range level to say ah yes it's much more likely that we're gonna see higher than this range with no longer in play then we will take our previous range in play which was basically the price action between December and late February right this would be our new range but for now all right the daily is looking pretty strong but we do not end there we want to zoom out even more and look at the weekly so very good body looking very good so if you're watching this video now today is recorded on Thursday May 8th right if we have this week's close body above our range high then we would need to mark our new technical key level range around those areas so it's actually very surprising it is actually a very good time to record this video now because this is also prime example of determining if this range is out of play on the upside so weekly close is usually how I determine is our range still in play or not okay okay now comes to our conclusion so remember the most important principle okay from identifying key levels in price action trading is that the more reactions a key level has seen the more valid and reliable it becomes whenever you see series of reactions around the same price point that area is a key level okay range low serves as your support range high serves as your resistance and the mid range serves as your SR flip region you can use weekly levels to support your technical key levels as well and I hope that you have learned a lot from this video and that you'll be able to draw out key levels yourselves okay when I first learned about key levels that actually took me weeks and months to really understand how it works but I promise you once you start getting in the habit of looking at charts and mapping out those key levels it will become very very easy to you and in fact even if you're not planning to trade mapping out key levels is very helpful because it gives you structure to the market right next time if your friends ask if you're bullish or bearish for Bitcoin or Ethereum you can just map out key levels and see how they perform and say huh I'm bullish because our key level says this I'm bearish because our key level says that right so key level in general is very useful tool but remember this is just the planning stage this is not the actual trade execution itself this is just the planning the rest of these will be for the actual trade executions so stay tuned for the next video part two will cover risk management and psychology this is very important to learn okay then we'll cover confirmation versus deviation high timeframe versus low timeframe and entry models alright boys you know what to do smash up the like button and subscribe to the channel let us know okay down in the comments if you still have any questions regarding identifying key levels my name is Ron Sean and I out