$IO /USDT

Spot resistance refers to the level in technical analysis where an asset's price faces a challenge to continue rising, often encountering selling pressure. Traders and investors closely monitor these levels as indicators of potential price reversals or pauses in upward trends. When an asset reaches a resistance level, it indicates that the market views this price as overvalued, prompting many to sell their positions. As a result, the price struggles to move higher and may begin to reverse direction.

Spotting resistance is crucial in trading, as it helps traders make informed decisions. By identifying resistance levels on a price chart, traders can set exit points to lock in profits or place stop-loss orders to limit losses if the asset's price falls after hitting resistance. Moreover, when the resistance level is broken, it may signal a new upward trend, often resulting in increased buying activity as confidence grows.

However, resistance levels aren't always permanent. Strong market momentum, news events, or positive fundamentals can push prices above resistance, leading to a breakout. Knowing how to spot and react to resistance levels can significantly improve trading strategies, allowing for better timing in both entry and exit positions.

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