Support and resistance are key concepts used in technical analysis of assets[https://blog.quidax.com/cryptocurrency-market-analysis-part-iii-technical-analysis/amp/], including crypto assets.

Support refers to a price point where a decline is likely to pause because there is a concentration of demand or buying interest. Demand for a cryptocurrency asset rises as its price declines, creating the support zone. Furthermore, the opposite is true. When prices have grown, resistance zones form because there is more selling interest.

Observe how the price of bitcoin increased from April to August 2020 (in the chart below), reached $10,000 (a resistance point), and then started to decline. At that point, selling resistance resisted the rally. It is the point at which sellers are just as strong and aggressive as purchasers and halt the advance. The price falls from the top ($10,000 in this case) when the sellers (supply) outnumber the buyers (demand).

A resistance level becomes a resistance zone when more than one resistance level occurs at roughly the same price. Prices rarely rise and stop at the same level, of course. A support point is the opposite of a resistance point in that it is a single trough. It is a place where buyers become as powerful or aggressive as the sellers and stop a price decline.

The concept of support and resistance assumes that, in the future, prices will stop at these levels or zones and that they represent a remembered psychological barrier for prices.

Good support and resistance areas are prices where there has been multiple supports and resistances respectively as the case may be.