What is the difference between support and resistance levels?

Support and resistance levels are price points where cryptocurrency assets historically tend to stop or reverse direction. Support is a price floor where buyers typically emerge, preventing the asset from falling further. For example, if Bitcoin repeatedly bounces up at $40,000, that's support. Resistance is a price ceiling where sellers typically appear, preventing further gains. If Bitcoin struggles to break above $45,000 multiple times, that's resistance. These levels form based on historical trading activity and psychology—many traders watch these same levels, creating self-fulfilling prophecies. When price breaks through these established levels with volume, it often signals a significant move. Traders use these levels to set entry points, stop-losses, and profit targets.