The "2.0 Ceiling" – What is Resistance?
Think of Resistance as the ceiling of a room. It is the specific price level that an asset struggles to break through as it rises. When the price hits this line, it often bounces back down.
Look at Panel 2 in the graphic. A coin is climbing beautifully, but when it hits the $2.00 mark, it gets blocked. This $2.00 level is the Resistance. It's also called a Supply Area.
This happens because at that price, many traders are happy to take profit. Their sell orders create a wave of selling pressure (represented by the bear with the stop sign) that outweighs the incoming buyers. This supply overwhelms the demand, forcing the price back down, confirming the "ceiling" at $2.00.
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