Definition ∞ Resistance levels are price points on a chart where an asset’s upward movement historically encounters selling pressure, causing its price to pause or reverse. These levels indicate areas where a significant supply of the asset is expected to enter the market. Traders and analysts use resistance levels to anticipate potential price ceilings. They represent barriers that an asset struggles to surpass.
Context ∞ In cryptocurrency market analysis, identifying resistance levels is a fundamental aspect of technical trading strategies. News events or significant market developments can cause an asset to break above or fail to reach these levels, influencing investor decisions. Understanding these technical indicators provides insight into market psychology and potential price trajectories.
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