What are the support and resistance levels for investing in cryptocurrencies according to Investopedia?

1 answers

• Dilan EdirisooriyaSep 21, 2021 · 5 years ago
  According to Investopedia, support and resistance levels are important tools for investors to analyze and predict price movements in cryptocurrencies. Support levels are price levels where buying pressure is strong enough to prevent the price from falling further. Resistance levels, on the other hand, are price levels where selling pressure is strong enough to prevent the price from rising further. These levels are determined by analyzing historical price data and identifying areas where buying or selling activity has been significant. When a cryptocurrency price approaches a support level, it is expected to bounce back and continue its upward trend. Conversely, when a cryptocurrency price approaches a resistance level, it is expected to face selling pressure and potentially reverse its trend. Traders and investors use support and resistance levels to set entry and exit points for their trades, as well as to identify potential price targets and stop-loss levels. It's important to note that support and resistance levels are not foolproof indicators and should be used in conjunction with other technical analysis tools and market indicators to make informed investment decisions.
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