Crypto glossary
Pivot points
Pivot points are support and resistance levels calculated from the previous period's high, low and close, widely used by intraday traders.
The standard pivot point is the average of the previous period's high, low and close. From it, formulas derive resistance levels above (R1, R2, R3) and support levels below (S1, S2, S3). Daily pivots use the previous day's data, while weekly and monthly pivots serve swing traders. Variants such as Fibonacci, Camarilla and Woodie pivots use different formulas.
Because pivots are objective and recalculated automatically, many traders see the same levels, which can make them act as reaction points. Price above the main pivot is read as a bullish bias for the period and below it as bearish. In crypto, where the trading day has no natural close, daily pivots are typically based on the 00:00 UTC candle.
Pivots give no information about why a level should matter beyond the fact that others watch it. In strong trends price can blow through several of them, and different platforms may compute slightly different values depending on the session they use.
Example
Using yesterday's high of 3,200, low of 3,000 and close of 3,150 dollars, ETH's daily pivot is about 3,117 and R1 about 3,233. A day trader takes profit near R1.