Support and resistance: price floors and ceilings

Support is a price where a coin keeps stopping its fall and bouncing back up, like a floor.

Here $95 is support: buyers keep stepping in around that price.

Resistance is a price where a coin keeps stopping its rise and falling back, like a ceiling.

Here $110 is resistance: sellers keep taking profits around that price.

Because people remember prices. Someone who bought at $110 and watched it fall may sell as soon as it gets back to $110, just to get their money back. Someone who missed buying at $95 may buy the next time it gets there.

A breakout is when the price finally pushes through a floor or ceiling.

1. 1The coin has stalled at $110 three times.
2. 2It finally climbs to $116 and stays above $110.
3. 3The old ceiling at $110 often becomes the new floor: on the next dip, it may bounce at $110 instead of falling back to $95.

No. They describe what happened before, not what will happen next. A floor that held three times can break on the fourth: $95 can become $80.

Use them to understand a chart and to plan where you would sell if you are wrong, never as a promise.