/biz/ - Business & Finance

>>58060376
It's not arbitrary, it's psychology. Look at it this way: You're a hedge fund or other large investor. You know that fundamentally, the company will keep doing well for 5, 10, 20 years, whatever. Right now, you have all these hype articles giving a lot of momentum and retail money entering the space. They are not disciplined, are easily shaken out, or ready to become perma bagholders.
Because they're new, they use beginner trading techniques like support/resistance levels, fib retracements, etc. As a consequence, this is where a lot of retail money is concentrated. Wouldn't you, as a big bank or institution, want to look at the order books and shake people out over and over again? That's what they do at these gathering points. Big tickers are subject to some manipulation, and especially at these psychological levels.
More experienced traders will use them as a starting point and look for trends to be confirmed or rejected, or follow a consistent strategy like DCAing or buying it in blocks, but only if it drops a certain percentage, etc. Of course most of them probably already knew where the stock was headed a decade ago and their cost basis is disgustingly low. But my point still stands, this is something that happens on every stock on every timeframe