When traders look at the chart, they often notice that the price "stops" at certain points — either it stops falling or it stops rising. These zones are called support and resistance levels.
Support
This is a level where the price usually stops falling and bounces back up.
This is where buyers come to the market, believing the price is favorable.
Example: Bitcoin falls to $100,000, and it has turned around several times from this zone — therefore, $100,000 can be considered support.
Resistance
This is a level where the price stops rising and turns down.
This is where sellers appear to take profits.
Example: Bitcoin has failed to break $120,000 several times — therefore, this is resistance.
Why does this work?
This is market psychology:
At support, traders think: "Oh, cheap, it's time to buy."
At resistance — "Expensive, better to sell."
Important nuances
The more times the price bounces off a level, the stronger it is.
After a breakout, a level can change roles: old support becomes resistance and vice versa.
It is not always an exact line — more often it is a zone.
Example
The price $ETH held at $1,800 (support).
Failed to pass $2,000 several times (resistance).
Broke through $2,000 — and now this level has become support.
Support and resistance levels are a fundamental tool of technical analysis. Even the most complex strategies are almost always built around them.
