52-Week High/Low

The highest and lowest market price of a given asset over a period of 52 weeks or one year is referred to as a 52-week high and low.


What Is a 52-Week High/Low?

The 52-week high/low is the highest and the lowest price at which a crypto token or other asset has traded over 52 weeks. Investors use it to analyze an asset’s current price to predict its future price movements. A tradable asset often garners more attention from investors when it nears its 52-week high or low.

How Do Investors Determine the 52-Week High/Low?

The closing price of an asset determines the 52-week high/low. An asset may fluctuate above or below its 52-week record during a trading session. However, if the price does not close above or below this record, changes do not display as hitting a new high or low.

Why Does the 52-Week High/Low Matter?

Investors in the financial markets can use this 52-week high/low metric to set their entry or exit point for a given asset. In most cases, these fluctuations signal that the asset has reached its peak or low and may not rise or fall in the short term.

As a result, the 52-week high/low metric offers a level of resistance or support for a given tradable asset. Alternatively, suppose a stock pushes past its 52-week high and continues climbing. In that case, it could be an indicator that there are factors generating momentum to carry the price above the previous high. Investors believe this momentum will continue pushing prices in the same direction, making it a good time to buy. The same rationale can be applied to assets that dip below their 52-week low.

52-Week High/Low Reversals

A tradable asset that reaches a 52-week high intraday but closes negative that same day may have topped out. It means that the price might not go much higher soon. It can be determined if it forms a daily shooting star, which is when a security trades higher than its opening but starts dropping later in the day to close at or below the opening price. 52-week highs are often used to determine stop-loss levels to limit losses.
Given the upward bias inherent in the traditional markets, a 52-week high is a sign of bullish sentiment in the markets. There are usually many investors ready to give up some further price appreciation to lock some or all of the gains. Assets that hit the 52-week high are often the most susceptible to profit-taking, which leads to pullbacks and trend reversals.

The same applies when a stock hits a 52-week low but fails to register a new closing low. It is often an indication of a looming bottom. When that happens, short-sellers can start buying the asset to cover their positions.

Whether or not you believe in momentum when making investment choices, reviewing an asset’s 52-week highs and lows can help you make profitable decisions.

To learn more, you may check out our guide on how to read and analyze candlestick chart patterns in day trading!

How to Use 52-Week High/Low Metric in Crypto?

Traders often use this metric within the crypto sector to provide fundamental market insight. It is offered on all exchanges, including FTX and Binance.