What is the support line and resistance line

The support line is a straight line that connects two or more troughs of the price line and is not crossed by the price line in any manner. It will act as support for the price drop. That is, if the price declines, it will always rebound at the support line. As shown below:

The resistance line, also known as the pressure line, is a straight line that connects two or more peaks of the price line and is not crossed by the price line in any manner. The resistance line will constrain the price increase above the line: if the price pricks up, it will reverse and go down again when it meets the pressure line.

Support lines and resistance lines include many different forms, such as trend lines, channel lines, golden section lines, sidelines, and necklines of technical graphics, pressure, and support levels, as well as the line that connects the relative highs or relative lows.

Application of the support line

• Rising support line
  The rising support line is a line that slopes upward.

The two features of the rising support line:

1. Slopes upward.
2. Appears during a bullish trend or in the middle of price fluctuations.

The technical meaning of the rising support line:

1. When the falling price rebounds from the rising support line, it is a signal to buy assets.
2. When the asset price keeps falling down below the rising support line, it indicates that the buying power weakens and the market trend is likely to reverse, so it is time to sell assets.

Example of a rising support line in BTC market

• Descending support line

The descending support line has the same technical background as the rising support line. Below is an example of the descending support line in the BTC market:

• Horizontal support line
  The horizontal support line can be interpreted in the same manner. Below is an example of the horizontal support line in the BTC market:

Application of the resistance line

• Rising resistance line
  The rising resistance line is upward-sloping.

The two features of the rising resistance line:

1. It slopes upward.
2. Appears in a bullish trend or in the middle of price fluctuations

The technical meaning of the rising resistance line:

1. When the price, which had been rising, begins to fall and reaches the level of the resistance line, it is a signal to open short positions
2. When the currency price breaks through the upward resistance line, it indicates that a strong increase may ensue, so it is a signal to maintain or increase positions.

Example of the upward resistance line in the BTC market

• Horizontal resistance line
  The horizontal resistance line has the same technical meaning as the upward resistance line. Below is an example of it in the BTC market:

• Descending resistance line
  The descending resistance line has the same technical meaning as the rising resistance line. Below is an example of descending resistance in the BTC market:

Summary

Whether support lines/resistance lines or trend lines, they are both virtual tools for traders to judge the market trend and determine the timing of when to buy and sell assets. We suggest traders to use other tools as a supplement to predict market trends more accurately.

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Disclaimer

Please note that this article is for informational purposes only and does not offer investment advice. Gate.io cannot be held responsible for any investment decisions made. The information related to technical analysis, market judgment, trading skills, and traders’ sharing should not be relied upon for investment purposes. Investing carries potential risks and uncertainties, and this article does not guarantee returns on any investment.