Level 2 — Understanding Markets
Support and resistance
5 minute read
A floor and a ceiling
Illustrative example · not live data
Support is a price level where falling prices tend to stop and bounce — because buyers see it as cheap and step in. Think of it as a floor.
Resistance is the opposite: a ceiling where rising prices tend to stall, because sellers take profits and buyers get cautious.
These levels exist because people remember them. If Bitcoin bounced off $60,000 twice before, traders watching the same chart will place buy orders there again — making the level work a third time.
When a price breaks decisively through a level, roles often flip: an old ceiling becomes a new floor. The AI Chart Analyst on this site marks these levels on the chart for you automatically.
Key points to remember
- Support = a floor where buyers step in
- Resistance = a ceiling where sellers step in
- Levels work because many traders watch the same ones
- Broken ceilings often become new floors