$FLM /USDT

In technical analysis, "support" and "resistance" are critical concepts that help traders make informed decisions. Support refers to a price level where a downtrend may pause due to a concentration of buying interest. At this level, buyers often enter the market, preventing further price declines. Traders watch support levels closely to identify potential entry points for long positions, anticipating that prices will rebound.

Resistance, on the other hand, is the price level where an uptrend may stall due to selling pressure. Sellers are more active at these levels, causing the upward momentum to weaken or reverse. Traders use resistance to identify potential exit points or opportunities to short a stock, expecting the price to fall.

The interplay between support and resistance creates a trading range, and a breakout—either above resistance or below support—can signal a strong shift in market sentiment. For example, if a price breaks above resistance, it may indicate bullish strength, while a drop below support could signify a bearish trend.

Understanding support and resistance helps traders anticipate price movements and develop strategies to minimize risk and maximize profits. They are essential for technical analysis, guiding traders through volatile market conditions.

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