Support and Resistance
Price zones where a crypto asset has historically tended to stop falling or stop rising as buyers or sellers become more active.
Support and resistance are common technical analysis concepts used to describe price areas where a crypto asset may struggle to move lower or higher. Support is a zone where buying interest has previously been strong enough to slow or reverse a decline. Resistance is a zone where selling interest has previously been strong enough to slow or reverse a rise. These levels are not exact lines; they are better viewed as areas where traders may pay closer attention to price behavior.
They matter because many traders use them to plan entries, exits, stop-loss levels, and risk management. For example, if Bitcoin repeatedly bounces near $60,000, traders may treat that area as support. If it repeatedly fails to rise above $70,000, that area may be seen as resistance. A break above resistance can suggest stronger demand, while a drop below support can suggest weaker demand, but neither outcome is guaranteed. Support and resistance work best when combined with other context, such as trading volume, trend direction, and broader market conditions.
Other terms in Technical Analysis
Bollinger Bands
A volatility indicator that plots bands around a moving average to show when a crypto asset may be unusually high, low, or entering a volatile period.
Bullish Divergence
A bullish divergence is a chart signal where price makes lower lows while an indicator makes higher lows, hinting that selling pressure may be weakening.
Candlestick Chart
A price chart that shows an asset’s open, high, low, and close over repeated time periods.
Fibonacci Retracement
A charting tool that marks possible support and resistance levels based on Fibonacci ratios after a price move.