Why do price movements often stop at resistance levels?

Resistance levels are price points where selling pressure historically increases, causing price rallies to stall. This happens because many traders set sell orders at these levels, expecting the price to bounce back down. When a price approaches resistance, sellers become more aggressive while buyers hesitate, creating a supply-demand imbalance. Additionally, traders using technical analysis watch the same resistance levels, creating a self-fulfilling prophecy—everyone expects the price to stop there, so they act accordingly. However, resistance isn't absolute; if buying pressure is strong enough, the price can break through to new highs. Think of it as a traffic jam: many cars want to exit at the same point, temporarily slowing overall movement.