The fluctuations in price charts are, in fact, a real-time reflection of market sentiment.

When I first started trading, an experienced trader pointed to a certain line on the chart and said: "Look at this line, it's where the bulls and bears are wrestling." At that time, I didn't quite understand it. After a few years of experience in the market, I finally realized that support and resistance are not rigid price markers, but rather a dynamic reflection of the collective psychology of market participants.

I want to talk about how to understand these key price levels and how to use them in practice.

**The Logic Behind Support and Resistance Levels**

Ultimately, this matter isn't that complicated. For example, if Bitcoin drops back to $60,000, what will happen in the market? Those who missed the opportunity before are thinking that this time they can get in, while those who invested at this level are pondering whether they should increase their positions to average down their costs. The convergence of such thoughts essentially represents the market's "collective memory" of a certain price level.

Resistance levels work the same way. When prices rebound to previous highs, trapped investors are finally able to break free and are eager to sell; at the same time, some rational traders may feel that the price is overvalued and are reluctant to chase it further. The tug-of-war between buying and selling pressure blocks the price from continuing to rise.

Interestingly, these key points appear not only at horizontal price levels but also in trend lines. Connecting two increasingly higher lows forms an ascending trend line, indicating that buyers are gradually taking control; conversely, connecting two increasingly lower highs forms a descending trend line, showing that sellers firmly control the pace.

Understanding this, you can read the market's true thoughts on the chart.