$NEIRO /USDT

In trading, understanding support and resistance is crucial for making informed decisions. These concepts represent price levels where an asset tends to reverse its direction.

Support is the price level at which an asset stops declining and starts to bounce back. It acts like a floor, preventing further downward movement. Traders watch for support levels to time buying opportunities, expecting prices to rise after touching support.

On the other hand, resistance is the price level at which an asset faces selling pressure, halting its upward trend. It acts like a ceiling, preventing the price from rising further. Resistance levels are critical for traders looking to sell or short, anticipating a price decline.

Identifying these levels helps traders spot potential turning points in price movements. When an asset breaks through support, it can signal a further decline, whereas breaking resistance may indicate the potential for a stronger upward trend. The more times a support or resistance level is tested without breaking, the stronger it becomes, making it a vital aspect of technical analysis in predicting market trends.

Mastering support and resistance helps traders optimize entry and exit points, manage risk, and maximize profit potential.

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