If you look at the chart and see that the price "broke the level" — it can be a powerful moment. But it's important to understand what exactly it broke and why it matters. Let's break it down as simply as possible.
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🧱 What is a level?
A level is a place on the chart where:
— The price often used to stop or reverse earlier
— There was a struggle between buyers and sellers
There are two types:
1. Horizontal level — for example, where there were many touches (support and resistance)
2. Psychological level — these are round numbers that everyone notices:
— $1,000
— $10,000
— $30,000
— $100,000
🔎 Why are they important?
— They often place pending orders there
— The crowd is oriented
— Trend reversals happen there
🚀 What does it mean when 'the price broke the level'?
A breakout is when the price confidently passes through an important zone and fixes above or below.
It's as if the price said:
> "That's it, this level no longer holds — I'm moving on."
📊 How to understand that a breakout is genuine and not false?
Here is the classic scenario of a true breakout:
1. The first candle breaks the level and closes above
2. The next candle also moves in the same direction and confirms the movement
3. The market starts to accelerate — momentum appears
✅ When is the best time to enter?
There are 3 options:
1. Aggressive entry — after the first candle closes
— You can earn more
— But there is a risk of a false breakout
2. Confirmation — entry after the second candle
— Safer
— Part of the movement has already occurred
3. Retest of the level — the price returns and tests the broken level
— The calmest and clearest entry
— But there isn't always a retest!
🧠 How is this related to psychology?
A breakout of a level is not just a price movement. It is:
— Change of control (from sellers to buyers or vice versa)
— Panic or greed of the crowd
— Triggering of stops and exit of players from positions
That’s why a breakout is a strong trading signal if you understand what is behind it.
Ю✍️ In summary:
— Levels are zones where the price "stops to think"
— Breakout = the price decided and went further
— A true breakout = confirmation with candles and momentum
— The safest entry is on the retest
— Breakout trading is about working with crowd psychology
#bitcoin #crypto #tradingguide #supportresistance #priceaction
