Support and Resistance

Identify key price levels where the market reacts, such as support and resistance. The fundamentals of any technical analysis.

What are Supports and Resistances?

📊 Support: a price level where demand is strong enough to stop a price decline. The price "bounces" from the bottom.

📊 Resistance: a price level where supply is strong enough to stop a price increase. The price "bounces" from the top.

🔄 When support is broken, it becomes resistance (and vice versa)!

🎯 How to identify? • Look for levels where the price has bounced multiple times • The more "bounces", the stronger the level • Round numbers are often natural S/R ($10k, $50k, $100k)

Example: BTC and the $30,000 Level

📈 In 2023, Bitcoin tested the $30,000 level multiple times: • April 2023: BTC reached $30,000 and was rejected (resistance) • June 2023: Another attempt rejected again • October 2023: Breakout of $30,000 with strong volume! • After breaking out, $30,000 became support

💡 Conclusion: The more often a level is tested, the more significant its breakout becomes.