Last week delivered a strong market-wide rally, with many coins breaking out of key resistance levels. While not every asset joined the move, the overall momentum was clearly bullish.
The key question now is: how should you trade these breakouts, and what comes next?
The biggest thing to watch is the market's reaction after the breakout. A healthy breakout shouldn't be followed by a deep correction. It's perfectly normal to see the price pause, move sideways, or consolidate for a few days, but the breakout level should continue to act as support.
Small pullbacks on lower timeframes are expected and can even provide attractive entry opportunities. However, on the higher timeframe, you don't want to see price falling back well below the breakout zone, as that weakens the bullish structure.
The ideal scenario is a period of consolidation above the breakout level, allowing the market to build strength before the next leg higher. As long as that breakout zone continues to hold, the trend remains constructive, and pullbacks can be viewed as potential buying opportunities rather than signs of weakness.
The key question now is: how should you trade these breakouts, and what comes next?
The biggest thing to watch is the market's reaction after the breakout. A healthy breakout shouldn't be followed by a deep correction. It's perfectly normal to see the price pause, move sideways, or consolidate for a few days, but the breakout level should continue to act as support.
Small pullbacks on lower timeframes are expected and can even provide attractive entry opportunities. However, on the higher timeframe, you don't want to see price falling back well below the breakout zone, as that weakens the bullish structure.
The ideal scenario is a period of consolidation above the breakout level, allowing the market to build strength before the next leg higher. As long as that breakout zone continues to hold, the trend remains constructive, and pullbacks can be viewed as potential buying opportunities rather than signs of weakness.