Breakout
Breach of a key technical level indicating a directional move.
Beginner-friendly explanation
A breakout happens when price goes beyond an important zone (like resistance or support). It can signal the start of a new price move.
Example:
If Bitcoin is stuck at €30,000 for days, then breaks above with strength, it's called a bullish breakout.
Intermediate-level insight
Breakouts are often confirmed by high volume, showing market interest. Distinguishing true breakouts from fakeouts is key. Context matters: trend, volume, multiple tests.
Example:
An ascending triangle breakout with rising volume and a close above resistance is a strong technical signal.
Advanced perspective
Breakouts are used in advanced strategies like breakout trading, volatility squeezes (e.g., Bollinger), or liquidity traps (e.g., fakeout followed by reverse breakout). Entry timing (on close, on retest) is key.
Example:
A bullish breakout with RSI divergence and no volume is suspicious. A seasoned trader might wait for a retest of the broken level before entering.
Technical & Chart Analysis
breakout, resistance, support, fakeout, volume, triangle, pullback, squeeze, retest