1. Support Level (Yellow Line):
- The support level is a price level where a downward trend tends to pause due to a concentration of demand (buying interest).
- In the chart, this is shown as a horizontal yellow line.
2. price Action (White Zigzag Line):
- The white zigzag line represents the price movement of an asset over time.
- As the price drops and approaches the support level, it experiences buying pressure (demand), which prevents it from falling further.
3. Buy Pressure (Marked with Green Circles and 'V'):
- Each time the price reaches the support level, buying pressure increases. This buying activity pushes the price back up, preventing it from breaking below the support level.
- The points where the price touches the support level and bounces back up are marked with green circles and labeled as "Buy pressure."
4. Behavior at Support Level:
- The repeated interaction of the price with the support level suggests that this is a strong area where buyers are willing to purchase the asset, thus supporting the price.
- If the support level holds, the price is more likely to rebound, but if the selling pressure is too strong, the support level may eventually break, leading to a further decline in price.
In summary, the support level is a critical concept in technical analysis, indicating where buying interest is strong enough to prevent prices from falling further. Traders often use this level to make informed decisions about when to buy an asset.
