What is Support?
Let's find out Support meaning, definition in crypto, what is Support, and all other detailed facts.
Support is a price level that keeps an asset's price stable. Usually, support levels are formed by significant buying pressure in a certain price range. However, support levels can also be created by large buy walls. This happens because the buy walls make it difficult for the price to drop lower.
Therefore, a support level is typically triggered by a big supply of buyers in a particular price range. Besides, it operates as a “floor.” Overall, the price can only decrease under heavy selling pressure when it is at a support level.
Usually, traders construct support lines based on prior lows because it helps to identify probable price reversal points. The reversal points can suggest good buying options.
Support levels are mostly portrayed by straight horizontal lines. However, they can also be represented by diagonals. Though diagonals are mostly interpreted as trend lines.
When a support level is breached, it’s more likely to become a resistance level. The resistance level has the opposite impact in comparison to the support level. Thus, it would operate as a “ceiling.” This means that it would stop the price from climbing any further. Usually, when resistance or support levels are breached, great trading options develop.
Keep in mind that you should always consider at least two previous lows when creating support lines. The level of trustworthiness of your claim depends on the amount of evidence you have to back it. When drawing resistance and trend lines, the same rules apply.