Support
Support is a price area where falls have stopped before, because buyers stepped in. Draw it through the lows where the price bounced.
Resistance
Resistance is an area where rises have stalled before, because sellers took profit. Draw it through the highs where the price turned down.
They are zones, not exact lines
Treat a level as a band of a few dollars or a percent or two. Round numbers like $100,000 for Bitcoin often act as levels because many people watch them.
When a level breaks
If the price closes clearly through resistance, that old ceiling often becomes new support (and the other way round). This flip is called a role reversal.
Example
ETH bounced near $3,000 three times last month: that is support. It failed twice near $3,400: that is resistance. A daily close above $3,400 would suggest the range has broken upward.
Remember
- The more times a level held, the more people watch it.
- Levels can break without warning; use a stop-loss.
- Check a bigger time frame: daily levels matter more than 5-minute ones.