Support and resistance

Supports and resistances are two technical analysis tools used to diagram and measure the price trend of a market, trying to predict possible future trends. Since they are particularly valuable tools for interpreting the state of an asset and its outlook, support and resistance indicators are mainly used for online trading and cryptocurrency trading.

The support indicator, as the name suggests, is used to indicate the horizontal level on the chart around which the fall in the price of an asset stops and below which the price is unlikely to fall. Once the level is reached, the trend generally rebounds upwards again.
Support, metaphorically speaking, can be associated with a floor. When we throw a ball towards the ground, the ground will block its fall, causing it to bounce back up again.

The other side of the coin is represented by the resistance indicator. In a market where the trend is bullish, i.e. tends to go upwards, resistance is the horizontal level of the chart around which the price is unlikely to go up, and therefore stops its rise. Think of resistance as a ceiling: if we throw the ball upwards, this will prevent it from rising further.

When an asset approaches a support or resistance level, it can essentially behave in three distinct ways.
The market can experience a rebound: the price fails to break the support or resistance line, thus reversing its trend. The more a support or resistance level is confirmed by price signals or spikes, the higher the probability of observing another change of direction at these levels. 
When the price crosses the line of support and resistance, we can instead speak of a breakout, as referred to in technical analysis. Depending on the market under analysis, breakouts are important bullish or bearish signals.
On the other hand, if the price of the asset remains constant, thus neither crossing nor falling away from support or resistance, we are speaking instead of a signal or stationary behaviour.

Identifying supports and resistances during the technical analysis of a market is quite simple. It can be done for all charts of any asset and in all time horizons: daily, weekly, monthly. In any case, it is good to keep in mind that the longer the time horizon, the more significant the support and resistance analysis will be.

By drawing two lines, one at the support level and one at the resistance level, it is possible to have a more indicative graphical representation of the market trend. If the line drawn is horizontal (i.e. the support and resistance indicators are more or less stable), the asset will present a more or less constant trend over time.
An oblique line, on the other hand, refers to more dynamic support and resistance levels. This can be synonymous with a possible trend change within the market. 

Correlated words

Bull Trap

A bull trap is a short bullish movement in a bearish market which can mislead people just like a trap.


In economics, volatility indicates the variation of the price of a financial instrument through time.

Supply and demand

In economics, supply and demand correspond to the two main market variables and describe the behaviour of those who buy and sell goods or services.


The amount of currency traded in a given period.

Market Trend

A perceived tendency of financial markets to move in a particular direction over time.


Trading is a speculative activity of buying and selling financial assets, with the goal of making a profit.

Stop Order

A trading order that allows you to set a price at which another order is triggered.


The difference between the execution price of an order and the price entered in the order.


A value that measures the return generated by an investment.


A strategy that inflates the price of a cryptocurrency to generate profits only for those who implement it.

Prediction Market

Exchange-traded markets created for the purpose of trading the outcome of events.

Order Book

The list of all the prices at which traders are willing to trade a certain amount of cryptocurrency on an exchange.


A service that collects data not available on blockchain, verifies it and provides it to smart contracts


When the price of a cryptocurrency rises very fast, they say it soars 'to the moon'.

Market Order

Instant buy or sell at the next best price available on the market.

Market Maker

Companies or organised entities that, in partnership with an exchange, are always willing to buy and sell a cryptocurrency.

Market Cap

The total value of all the coins or tokens of a cryptocurrency in circulation.

Limit Order

A buy or sell order that is executed only when the cryptocurrency reaches the set price.

Futures Contract

A contract that regulates the execution of a transaction at a predetermined price on a specific date.


Fear, Uncertainty and Doubt refers to a negative market sentiment

Circulating Supply

The number of units of a cryptocurrency available on the market.


The Foreign Exchange Market allows fiat currency trading.


Fear Of Missing Out is an expression often used in the context of trading and cryptocurrencies.


ETFs are passively managed investment funds that replicate the value of a reference index called a benchmark.

Buy Wall and Sell Wall

High number of purchases or sales demanded at a certain price.

Bull Market

A market where there is an upward price trend

Break-Even point

The balance point between losses and gains, income and expenditure.

Bid and Ask

Supply and demand on a cryptocurrency exchange.


A standard for measuring the performance of a financial instrument or market.

Bear Market

A market phase characterised by price lows.


Acronyms used to indicate the maximum and minimum price of a cryptocurrency.

Bear Trap

A Bear Trap is a bearish movement in a bullish market that confuses investors.

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