Support Levels

Definition ∞ Support levels are price points on a chart where a downward trend is expected to pause due to a concentration of buying interest. These levels indicate where demand is strong enough to prevent further price declines, at least temporarily. They are identified by historical price action where an asset has previously stopped falling and reversed direction. Technical analysts use support levels to anticipate potential price stabilization or reversals.
Context ∞ Discussions of support levels are a regular feature in cryptocurrency market analysis, especially during periods of price volatility or corrections. Traders often watch these levels closely to identify potential entry points for purchases or to assess the strength of a downward movement. A decisive break below a significant support level is frequently reported as a bearish signal, suggesting further price depreciation may follow.
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