Resistance
Resistance is a price level where selling pressure typically overwhelms buying, causing price to stall or reverse. It's the ceiling that price keeps bumping its head against.
Understanding the Concept
Every pump has a ceiling, at least temporarily. Resistance shows you where the ceiling is before you get there. If SOL's been rejected at $120 five times, guess what happens when it hits $118? Traders start selling. Some are taking profits, others are shorting, but everyone's watching that level. You don't want to be the person buying at $119 expecting $150 when there's a wall of sellers at $120. Resistance becomes support when broken—that's a critical concept. Once price clears resistance convincingly, old sellers become new buyers defending that level.
Real-World Example
Avalanche hits $45 and gets slammed down. Happens again two weeks later. Third time it approaches $45, you're watching closely. Either it breaks through with serious volume (bullish) or it gets rejected again (time to sell or short).
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