What Is Support?
Support is a price level where buying interest is strong enough to prevent further price decline. Think of it as a floor — price falls to the level, buyers step in, and price bounces. Support forms at previous swing lows, round numbers, moving averages, and areas of historical price congestion.
How Support Works
When price approaches a support level, buyers who missed previous entries place orders, short sellers take profits, and bargain hunters emerge. This concentration of buy orders creates a barrier against further decline. Like resistance, the more times support is tested, the more significant it becomes — but repeated testing also absorbs buy orders, weakening the level.
Why It Matters for Traders
Support levels are key decision points for entries. Traders buy at support with stops placed just below. When support breaks, it often becomes resistance (a "flip"). In crypto, support levels where significant open interest is concentrated often coincide with liquidation clusters — when they break, the cascade of forced selling amplifies the move.