A swing high is a local peak in price where the asset reaches a higher value than the surrounding candles before reversing downward. It represents a point of temporary resistance where selling pressure overwhelmed buying pressure. Swing highs are used as reference points for technical analysis, Fibonacci calculations, trend line construction, and identifying potential resistance zones where price may struggle on future rallies.
Example:
Bitcoin reached $124,249 on August 25, 2025, creating a swing high as it was higher than all prices in the surrounding weeks. This swing high served as a critical reference point. Traders used it to draw Fibonacci extensions, measure potential retracement levels, and identify resistance zones. When Bitcoin rallied again in October and approached the previous swing high, traders expected resistance near that level and set profit targets accordingly.