Supply zone resistance describes a price range on a chart where a high concentration of sellers is present, typically from previous price peaks or areas of significant distribution. As an asset’s price approaches this zone, increased selling pressure is expected, making it difficult for the price to move higher. This area acts as a barrier, often causing price reversals or consolidation. It represents a level where supply exceeds demand.
Context
Traders and analysts in digital asset markets frequently use supply zone resistance levels to identify potential turning points or areas where upward price momentum might pause. Breaking through a strong supply zone can signal a significant shift in market sentiment and the potential for further price appreciation. Conversely, repeated rejections from such zones confirm their strength and suggest continued downward pressure.
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