What is the definition of support and resistance in the context of cryptocurrency trading?

1 answers

• JOHNJun 04, 2024 · a year ago
  Support and resistance levels play a crucial role in cryptocurrency trading. They are like invisible walls that influence the price movements of cryptocurrencies. Support is a price level where there is a strong demand for a particular cryptocurrency, causing the price to stop falling and potentially reverse. Resistance, on the other hand, is a price level where there is a strong supply of the cryptocurrency, causing the price to stop rising and potentially reverse. These levels are determined by the collective actions of traders and investors. When the price approaches a support level, it is likely to find buying interest, which can lead to a price increase. Conversely, when the price approaches a resistance level, it is likely to face selling pressure, which can lead to a price decrease. Traders often use support and resistance levels to identify potential entry and exit points, as well as to manage their risk.
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