$DYM /USDT

In trading, identifying support and resistance levels is crucial for making informed decisions. These levels act as psychological barriers where price tends to either reverse or consolidate.

Support is a price level where an asset tends to find buying interest as it declines. Traders look for previous lows or zones where the market showed strength. When the price approaches support, buyers may step in, preventing it from falling further. If support holds, the price could bounce back, but if broken, it may signal further decline.

On the other hand, resistance is the level where selling interest is strong enough to prevent further price increases. This is usually where previous price peaks are found. When the price approaches resistance, sellers could take profit or short the asset, causing it to reverse downward. However, if the price breaks through resistance, it may indicate strength, leading to a potential new uptrend.

Spotting these levels helps traders set entry and exit points, manage risk, and plan strategies like breakout or reversal trades. Combining support and resistance analysis with other indicators enhances the reliability of predictions in volatile markets.

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