In Technical Analysis (TA), a breakout refers to price movements that cross below a support level or above a resistance level, often indicating that the price will continue in the breakout’s direction.
Breakouts with high volume are more significant than those with average volume. Higher volume increases the likelihood that the price will trend in the direction of the breakout.
Breakouts can occur from range or channel breaches or from price patterns like triangles, flags, wedges, or head and shoulders formations. They usually follow a period of lower volatility.
Breakouts can be either bullish or bearish.
A bearish breakout, also known as a downward breakout or breakdown, happens when a crypto’s price falls below the support level, a price point where buying pressure previously halted the decline.
A bullish breakout signals that buying pressure is increasing, while a bearish breakout indicates growing selling pressure. Bullish breakouts may suggest the start of an upward price trend, whereas bearish breakouts could signal the beginning of a downward trend with the potential for new lows.
