A supply zone is a technical analysis term referring to an area on a price chart where a significant concentration of sellers is present, leading to downward price pressure. When an asset’s price reaches this zone, it often encounters resistance, causing it to stall or reverse. This area typically corresponds to previous peaks or resistance levels where selling interest was strong. It indicates a price range where supply exceeds demand.
Context
In crypto market analysis, supply zones are frequently identified in news reports and technical commentaries as critical levels to watch for potential price reversals. Breaking above a strong supply zone is often seen as a bullish signal, indicating that buying pressure has overcome selling interest. Conversely, repeated rejections from a supply zone confirm its strength as a resistance level.
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