Definition ∞ A market breakout occurs when an asset’s price moves decisively above a resistance level or below a support level. This event often signals a significant shift in market sentiment and can precede a sustained price trend in the direction of the breakout. It is typically accompanied by increased trading volume, indicating strong conviction among market participants. Traders and analysts often monitor these occurrences as potential entry or exit points for positions.
Context ∞ In cryptocurrency markets, breakouts are closely watched indicators, often amplified by the volatile nature of digital assets and rapid news cycles. The reliability of breakouts can be affected by market manipulation or “fakeouts,” where prices briefly cross a level before reversing. Future analytical tools aim to better distinguish genuine breakouts from false signals, providing more accurate insights for traders.
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