Hi Guys, this is very informative and knowledgable specially for new comers so please spend 5 mints of yours that may help you to do safe trading.
Many traders lose money because they confuse breakouts with fakeouts. Let’s simplify this.
What is a Breakout?
A breakout happens when price moves upwards and breaks a key resistance level.
What is a Breakdown?
A breakdown happens when price moves downwards and breaks a key support level.
2 Things You MUST Check Before Any Breakout
A real breakout always needs:
1. Strong Volume
Always check SPOT volume, not Futures.
Futures show open trades, not real buying.
Spot volume shows actual demand.
2. Trend Strength
Check RSI on the same timeframe (ideally 1H or 4H).
RSI above 70 → trend already exhausted (likely cool down).
RSI below 40–50 with strong volume → breakout has fuel.
How to Identify a Fakeout (Real Example)
$BTC moved from 87k → 93–95k, got rejected, pulled back to 92k, then pushed again and broke 95k.
But:
Earlier breakout (90–92k): good volume + strong trend
95k breakout: low volume + exhausted strength
Result?
All buying power was spent breaking 95k.
Bears took control, and market dropped sharply.
➡️ Lesson:
Just breaking a level doesn’t mean next target will come.
Always check volume, RSI, and Long:Short ratio (Coinglass).
Why Breakdowns Are Easier Than Breakouts
Market falls easily, rises with difficulty.
Shorts on breakdowns are usually safer.
Longs on breakouts need full confirmation.
Rules for a Clean Breakdown
Still check the same 2 things:
Volume
Trend Strength
⚠️ Important:
Breakdown with high volume → often a short trap
Breakdown with low volume → higher chance of continuation
Quick Summary
Breakout: Volume should be higher
Breakdown: Volume should be lower
Never trade blindly on level breaks
Always respect trend + volume
📌 Smart traders react to data, not hype.
please like and share your comment if you like my efforts and also mention your output on this.
Lets Grow together in Crypto World.
