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Resistance (technical analysis)
- In technical analysis, “resistance” is a price level where a token faces consistent selling pressure, preventing it from rising higher. This level acts as a ceiling, as traders see it as an attractive point to sell, often due to perceived value limits.
- When the price nears resistance but fails to break through, it signals strong selling interest. The more often a token price tests this level without surpassing it, the stronger the resistance is considered.
- Understanding resistance helps traders identify potential exit points and anticipate price pullbacks, making it a key factor in informed trading decisions.
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