Support and resistance are fundamental concepts in technical analysis, referring to price levels where a financial asset’s downward trend tends to halt or reverse (support) and where an upward trend tends to halt or reverse (resistance). These levels are established by previous price action and represent psychological barriers for market participants. Support indicates a concentration of buying interest, while resistance signifies a concentration of selling interest. They provide insights into potential future price movements.
Context
The concepts of support and resistance are constantly applied in cryptocurrency market analysis and are frequently mentioned in news reports detailing price forecasts and trading strategies. Traders use these levels to identify potential entry and exit points, as well as to gauge the strength of price trends. A decisive breach of these levels often signals a significant shift in market sentiment or momentum, prompting further analysis.
The crypto market is experiencing a downturn due to escalating regulatory concerns, a derivatives market deleveraging, and key technical levels breaking.
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