Support

In technical analysis, a support level is a price point at which demand for an asset is thought to be strong enough to prevent the price from declining further. Support levels are identified by examining historical price charts and locating areas where the price has bounced upward on multiple occasions, creating a visible floor. The logic behind support is that at these prices, buyers who previously missed an entry or who believe the asset is undervalued will step in, creating enough demand to absorb selling pressure and push the price back up.

Support can be found in several forms. Horizontal support is the most common — a flat price level that the market has repeatedly respected. Dynamic support, such as an upward-sloping trendline or a rising moving average, shifts over time as the trend evolves. Fibonacci retracement levels, pivot points, and prior resistance levels that have been broken and "flipped" to support are also widely used by technical traders to anticipate where buyers may re-enter the market.

When a support level is broken convincingly — especially on high volume — it is often interpreted as a bearish signal, suggesting that the prior balance of supply and demand has shifted and that the asset may decline further. This is sometimes referred to as a "support break," and the former support level frequently becomes a new resistance level in future price action, a phenomenon known as role reversal. For algorithmic traders, support levels are commonly used to define entry zones, set stop-loss orders below key floors, and identify risk-reward ratios for new positions.