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Breakout
A decisive close beyond a key support, resistance, or consolidation pattern — usually with volume confirmation.
What it is
A breakout is the moment price exits a defined range or pattern. The 'breakout' alone isn't tradeable — it's the CONFIRMED breakout that matters. Confirmation requires: (1) a close beyond the level (not just a wick), (2) volume meaningfully above average, (3) ideally a retest of the broken level as new support. Without volume, ~70% of crypto breakouts fail and reverse within 24 hours ('fakeout'). The classic high-conviction breakout pattern is the 'compressed Bollinger Bands + rising volume' combo: low volatility followed by an explosive expansion.
Example
SOL ranges $80–$84 for 10 days. On a Tuesday afternoon, it closes the 4h candle at $86.50 on volume 4× the 20-period average. Within 24 hours it's at $91 — a textbook volume-confirmed breakout.
How Indikora uses Breakout
Indikora's Volume Spike Scanner detects breakouts in real time: it monitors the last-hour volume vs the 10-hour baseline and surfaces 2×+ spikes with price confirmation as high-confidence candidates.
Related terms
- Bollinger Bands — Volatility envelope: a 20-period SMA flanked by two bands at ±2 standard deviations.
- Volume — The number of units (coins or contracts) traded in a given period — a direct measure of market participation.
- Support and Resistance — Horizontal price levels where buying or selling pressure has historically reversed price.