$COS /USDT

In trading, support and resistance levels are critical concepts for analyzing price action. These levels represent price points where a stock, commodity, or currency pair tends to stop and reverse direction, making them key in understanding market trends.

Support refers to a price level where a downtrend is expected to pause due to a concentration of buying interest. When the price approaches support, buyers step in, creating demand that prevents further decline. If this level holds, the asset's price may bounce upward, signifying a potential buying opportunity.

On the other hand, resistance is the opposite. It represents a price level where a rising market encounters selling pressure. As the price approaches resistance, sellers take control, which may lead to a reversal or consolidation. Traders often use resistance levels to determine when to sell or short the asset.

In essence, support acts as a "floor" for prices, while resistance serves as a "ceiling." When these levels are broken, the market may experience significant movements, making them valuable for technical traders. Identifying support and resistance helps traders make more informed decisions regarding entry and exit points.

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