How to determine if the price has truly broken resistance or just temporarily pierced support depends on the following technical factors:
1. Trading volume
True resistance breakout: Volume higher than normal, indicating strong buying pressure.
Temporary support pierce: Low volume, lack of confirmation from sellers.
2. Candle close
Look at candle closes in larger timeframes (1H, 4H, 1D):
True breakout: Candle closes above the resistance zone, long and clear body.
Fakeout: Price only wicks through the zone and then closes back inside.
3. Retest
After breaking, if the price returns to retest the recently broken area:
Successful retest and then continues in the right direction => confirms a true breakout.
Failed retest, reverses => high likelihood of a fake breakout.
4. Support indicators
RSI, MACD, or OBV confirms the trend
True resistance breakout if RSI exceeds 50 and continues to rise.
If breaking support without a strong RSI drop => likely just a temporary pierce.
5. Multi-timeframe analysis
Don’t just look at the 5m-15m timeframe, need to check in 1H, 4H, D1 to confirm the main trend.
SUMMARY:
• A true resistance breakout usually comes with high volume, a clear candle close above the resistance zone (not just wicks), a successful retest, technical indicators in agreement with the uptrend (e.g., RSI above 50), and confirmed on larger timeframes like 1H, 4H, or D1.
• A temporary support pierce often occurs with low volume, only wicks through the support zone and then retracts, a failed retest (price reverses), indicators not in agreement with the downtrend, and no clear confirmation on larger timeframes.