Domina CHOCH and MSS: The two keys to correctly reading the crypto market

Many traders lose money by missing the right timing. The difference between entering a winning trade and a losing one is often not fundamental analysis, but recognizing when the (market has truly changed direction). Two technical analysis tools that make a difference: the market structure change (MSS) and the character change (CHOCH).

MSS: When the market says “change of plans”

Imagine Bitcoin was forming higher highs and higher lows (the classic uptrend). Suddenly, it breaks below a level it shouldn’t break. That’s not a normal correction—it’s a phase transition, technically called MSS.

The market has three “modes”:

• Bullish mode: rising highs (HH) and rising lows (HL)
• Bearish mode: falling highs (LH) and falling lows (LL)
• Lateral mode: consolidation without a clear direction

When the price decisively breaks these patterns, the market is signaling that it has changed channels. It’s like buyers saying “we can’t hold this anymore” and sellers taking control.

In practice:

• Identify those “sacred” levels—where the price always bounced or stalled
• When they are definitively broken, that’s a potential MSS
• Don’t enter at the first touch; wait for re-validation of the broken level
• Place stops just outside to avoid bigger losses if it’s a false alarm

CHOCH: The market attitude shift

Here’s the interesting part: the CHOCH is the “change of character”—you observe how the way the price moves has changed, not just where it is.

In a downtrend dominated by red candles and selling volume, suddenly two or three strong green candles appear. Is it just noise? Maybe. But if that coincides with increasing volume and RSI or MACD turning, then we are seeing a real change in buying attitude.

The same applies in reverse: during a rally, if candles lose strength, highs stop being “fresh” and start forming with less momentum, the market is signaling that buyers are getting tired.

How to take advantage:

• Watch volume spikes: are they rising or falling? That reveals real intent
• Use RSI or MACD to confirm if momentum is turning
• Higher timeframes (4H, 1D) are more reliable than minutes
• Don’t expect perfection; a CHOCH is an early signal, not a guarantee

The magic: Combine MSS + CHOCH

The power happens when both converge:

1. See an MSS: Price breaks a key level where it was “stuck”
2. Confirm with CHOCH: Price patterns, volume, and indicators turn
3. Enter with confidence: Success probability increases when both tools point in the same direction

Real example: In a downtrend, Bitcoin was forming lower lows. Suddenly, it breaks above a high it shouldn’t (MSS). At the same time, you see strong green candles, rising volume, and RSI leaving oversold territory CHOCH. That combination is a signal for long positions.

Common mistake: Confusing noise with a real change

Many traders see a couple of green candles and shout “CHOCH!”. Then the price drops again and they lose money. The difference:

• False alarm: One or two atypical candles without volume or indicator changes
• Real CHOCH: Sustained pattern + confirming volume + turning indicators

Protect yourself: use disciplined stops and don’t assume every break is final.

Summary for today’s application

• MSS identifies where: Break of key levels = possible structure change
• CHOCH confirms how: Change in price behavior, volume, and momentum
• Combined create a winning setup: MSS + CHOCH = high probability
• Always control risk: Tight stops, avoid over-leverage, patience

The cryptocurrency market rewards those who learn to read when it is truly changing its mind. MSS and CHOCH are the language the price speaks. Master them and your trading decisions will be infinitely more informed.