Supply and demand trading marks the origin of an impulsive move rather than the point where price turned. The area is drawn around the last few bars before the drop, on the argument that unfilled sell orders may remain there.
Drawn this way, a supply zone gives an entry band with a defined stop above it, which produces attractive risk numbers when it works. It is close kin to order-block and to the classical idea of resistance, with the difference being that a zone has width.
The evidential basis is thin. There is no way to verify that orders remain unfilled, zones are drawn differently by every trader, and fresh zones and old ones are treated differently on rules that are essentially conventions. Use it as a framework for defining risk, not as a claim about hidden orders.
Related: demand-zone, order-block, resistance, breaker-block, trade-location