Support and Resistance
Price levels where a cryptocurrency tends to stop and reverse direction due to concentrated buying or selling pressure
What are Support and Resistance?
Support and resistance are price levels where an asset tends to find buying (support) or selling (resistance) pressure strong enough to temporarily halt or reverse a price trend. These levels form due to market psychology and the concentration of orders.
Key Concepts
Support
- Price floor where buying pressure increases
- Previous low points
- Areas of demand
- Psychological levels
- High-volume nodes
Resistance
- Price ceiling where selling pressure increases
- Previous high points
- Areas of supply
- Round numbers
- Historical turning points
Trading Applications
Level Identification
- Historical price points
- Volume profile analysis
- Trend line intersection
- Moving averages
- Fibonacci levels
Trading Strategy
- Entry point selection
- Stop loss placement
- Target setting
- Breakout trading
- Range trading
Related Terms
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