Crypto glossary

Resistance

Resistance is a price area where sellers may become more active and temporarily halt a rising price. It is usually identified from places on the chart where earlier rallies stalled and turned back down.

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Why resistance forms

Resistance is the mirror image of support. If a coin was rejected near 80 several times, traders remember it. Holders who bought near 80 and suffered losses may sell when they can get out at breakeven. Others take profits there because they expect another rejection, and some place sell orders just below the level in advance.

Round numbers, previous lows that were broken, falling moving averages and all-time highs often act as resistance for the same reason: many participants are watching them.

An example

Say a coin rose to around 80 in January, April and June and each time fell back to 65. That creates a resistance zone near 80. If price approaches 80 again, traders watch whether it gets rejected once more or closes above it. A strong daily close at 84 on rising volume would suggest a breakout; a quick spike to 82 that ends the day at 77 would suggest the resistance is still in force.

Breakouts and role reversal

When resistance finally breaks, the sellers waiting there have been absorbed, and price can move quickly as short sellers close positions and new buyers join. After a clean breakout, old resistance often turns into support on the next pullback.

All-time highs are a special case. Above them there is no earlier price history, so there are no holders waiting to break even, which is why moves into new highs can be fast and volatile.

Common mistakes

Treating resistance as an exact line rather than a zone, and reacting to every touch. Buying the moment price pokes above resistance is risky, because many breakouts fail and fall back into the old range.

It also helps to remember that resistance is a description of past behaviour, not a law. Strong news or a shift in the overall market can carry price straight through a level that held many times before.

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Frequently asked questions

What is the difference between support and resistance?

Support is an area below the price where buying has tended to stop declines; resistance is an area above the price where selling has tended to stop rallies.

What happens when resistance breaks?

Price often moves further as waiting sellers are exhausted and new buyers enter. The old resistance may then act as support, though breakouts can also fail.

How many times must a level be tested to count as resistance?

There is no fixed number. Two or three clear rejections are commonly used, and levels visible on higher timeframes are usually given more weight.

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All glossary terms · Educational reference only — not investment, legal, tax or financial advice.