Support resistance refers to price levels in financial markets where an asset’s price tends to stop falling or stop rising. Support is a price floor below which a security is unlikely to fall, while resistance is a price ceiling above which it is unlikely to rise. These levels are identified by traders as potential points for trend reversals or continuations. They are derived from historical price action and trading volume.
Context
Support and resistance levels are fundamental concepts in technical analysis and are frequently referenced when discussing price action in cryptocurrency markets. Analysts often debate the significance and reliability of these levels, particularly in volatile digital asset environments. Their identification provides a framework for understanding potential price movements and setting trading strategies.
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