In trading, a breakout occurs when cryptocurrency price moves decisively above resistance or below support, often accompanied by significant volume increase, signaling the start of a new trend direction. Valid breakouts are confirmed by strong volume (indicating genuine conviction), closes above/below the key level (not just wicks), and sustained price movement beyond the breakout point. False breakouts ("fakeouts") happen on low volume and quickly reverse, trapping traders who chase without confirmation.
Example:
Bitcoin consolidated between $82,000 and $88,000 for six weeks, testing the $88,000 resistance four times without breaking through. On the fifth test, Bitcoin surged through $88,000 on 40% higher volume than the previous attempts, closing at $91,500. This high-volume breakout confirmed as real. Bitcoin never fell back below $88,000 and rallied to $110,000 over the following month (27% gain from breakout). Traders who waited for volume confirmation on the breakout entered at $89,000-$91,000, while those who bought earlier resistance tests at $87,500 were rewarded for patience as the breakout validated their range-top entries.