Short-Term Resistance
Short-term resistance is a price level at which an asset faces temporary difficulties in continuing its upward movement. This occurs due to profit-taking by traders or a high volume of sell orders in that area.
How Short-Term Resistance Forms
🔵 High Selling Activity
When the price reaches a certain level, many market participants start selling the asset to secure profits. This creates selling pressure and prevents further price growth.
🔵 Chart Analysis
Short-term resistance levels can be identified using technical analysis. They are often found by analyzing previous price peaks, Fibonacci levels, moving averages, and high-liquidity zones.
🔵 Trading Volume
A high volume of sell orders near a specific price strengthens resistance, as a significant amount of buying pressure is needed to break through it.
🔵 Psychological Barriers
Round price levels (e.g., $50,000 for BTC) often act as resistance, as many traders place sell orders at these key points.
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