Resistance Level
A "Resistance Level" in finance refers to a price point on a chart where an asset, such as a stock or cryptocurrency, tends to stop rising and may even reverse direction. This occurs because many traders believe the asset is overvalued at that price, leading them to sell. As a result, the increased selling pressure can prevent the price from moving higher.
Traders often use resistance levels to make decisions about buying or selling assets. When the price approaches a resistance level, they may look for signs of a reversal or a breakout. If the price breaks through this level, it may indicate strong buying interest, potentially leading to further price increases.