Breakout and fakeout

When price has been capped by a resistance level or held inside a range, many orders accumulate around its edges. A breakout happens when buyers or sellers overwhelm that level and price closes beyond it, often with a jump in volume. Breakout traders enter in the direction of the move, expecting the trapped stop orders and new momentum to carry it further.

A fakeout, or false breakout, pokes through the level and then falls back inside the range, frequently within the same candle. In crypto, fakeouts are common because thin weekend liquidity, leveraged positions and stop orders clustered just beyond obvious levels make it cheap to push price briefly past them.

To filter false signals, traders wait for a candle close beyond the level on a higher timeframe, look for rising volume or wait for a retest in which the broken resistance holds as support. None of these removes the risk, and waiting for confirmation means a worse entry price.