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How does support becoming resistance affect cryptocurrency prices?

avatarupup422Dec 26, 2021 · 3 years ago1 answers

Can you explain how the concept of support becoming resistance affects the prices of cryptocurrencies? What factors contribute to this phenomenon and how does it impact the overall market?

How does support becoming resistance affect cryptocurrency prices?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    Support becoming resistance is a concept that is closely monitored by traders and analysts in the cryptocurrency market. When a support level is broken, it often turns into a resistance level as traders who bought at that level now become sellers. This can lead to a temporary halt or reversal in the price movement. The strength of the support-turned-resistance level depends on various factors such as the volume of trading activity, the duration of the support level, and the overall market sentiment. Traders often look for confirmation of a support-turned-resistance level through multiple tests of that level. Understanding this concept can help traders make more informed decisions and manage their risk effectively in the cryptocurrency market.