Resistance levels are specific price points on a chart where an asset, such as a stock or cryptocurrency, tends to struggle to rise above. These levels are identified by observing past price movements, where the asset has repeatedly faced selling pressure. Traders often view these points as potential areas to sell or short the asset, anticipating that the price will reverse direction. When the price approaches a resistance level, it may indicate that buyers are losing momentum, and sellers are becoming more active. If the price breaks through this resistance, it can signal a bullish trend, leading to further price increases. Understanding resistance levels helps traders make informed decisions in the market.