What Is Support and Resistance & How to Crypto Trade With It

Cryptocurrencies have gained immense popularity over the past couple of years. With a recent boom in crypto valuations, the net market cap of cryptocurrencies stands close to $640 billion, the highest level since January 2018. There were over 51 million crypto traders globally in 2019, with some reports suspecting levels as high as 68 million. As more traders join crypto trading, one of the most popular questions is whether conventional trading concepts apply to crypto trading. In this, crypto traders wonder if the support and resistance concept can be adopted to analyze crypto prices better.

Support and resistance refer to specific price points (areas in graphs) on trading charts that witness massive buying and selling activity. Support is a price level at which an asset’s price stops falling. Whereas resistance is a level at which the price of an asset stops rising.

This post aims to address whether technical indicators, such as support and resistance indicators, apply to crypto trading. The key areas of discussion include:

What Are Support and Resistance? 

The trading industry uses a myriad of concepts to predict market movements. It is quite common to come across Wall Street posts indicating how critical technical indicators are flashing ‘buy’ or ‘sell signals.’