Market Pulse Daily

Almost every chart post on Square mentions support and resistance. If you're newer to trading, those words can sound like jargon. They're actually the simplest and most useful tools in technical analysis. Here are five rules, explained with charts from this week.
What they mean
Support is a price area where buyers have repeatedly stepped in and stopped a fall. Resistance is an area where sellers have repeatedly stepped in and stopped a rise. They work because traders remember those prices: people who missed a bounce wait to buy there next time, and people stuck at a top wait to sell when price gets back to break-even.
Rule one: think in zones, not lines
Price rarely turns at an exact number. Look at $ENA in the cover chart: its ceiling isn't one price, it's a band from 0.213 to 0.2165. Drawing zones instead of thin lines stops you from getting faked out by a small wick.
Rule two: more touches means a more important level
Ethena has hit that 0.213-0.2165 band three times since Oct 21 and been rejected each time. That makes it a level the whole market is watching. But there's a twist: every retest also uses up some of the sellers sitting there, so a level tested many times can eventually give way.
Rule three: broken resistance often becomes support
This is called a role reversal, or a flip. When price breaks above a ceiling, the buyers who missed it often wait for a pullback to that same area. Zcash showed this nicely this week: the 1,239-1,268 area capped it for days, then after the breakout it became the first support to watch.
Rule four: watch the lows, not just the levels
When price keeps knocking on the same resistance but each dip stops higher than the last, buyers are getting more aggressive. $DOGE is a good example: lows at 0.0748, then 0.0760, then 0.0767, all under the same 0.0801-0.0807 lid. Rising lows under flat resistance often build toward a breakout. Falling highs over flat support often build toward a breakdown.
Rule five: let the candle close
A wick through resistance is not a breakout. Many traders wait for a full candle to close beyond the zone on their chosen timeframe, for example the 4H, before treating it as real. It costs you a little of the move, but it filters out a lot of fake breakouts, especially around big news like today's Fed decision.
Putting it together
Before you look at any trade, mark three things: the nearest support zone, the nearest resistance zone, and whether the lows or highs are trending. On the cover chart, that reads: resistance 0.213-0.2165, support 0.195-0.197, and higher lows. That's a market leaning up but still capped, and a 4H close above 0.2165 is what would change the picture for $ENA .
Support and resistance won't predict the future, but they tell you where the important decisions happen, and where your idea is proven wrong.
Which coin should I break down next with these rules? Drop it in the comments, and follow Market Pulse Daily for daily charts. Not financial advice (NFA).
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