Breakout Retest
Price returning to test the former breakout level after the initial break — a resistance-turned-support confirmation and lower-risk entry point.
A Breakout Retest happens when, after breaking through a key resistance (or support) level, price returns to re-test that level before continuing in the breakout direction. The break converts resistance to support (or vice versa for a breakdown).
The retest provides: (1) confirmation that the breakout is valid — the level is holding, and (2) a better risk/reward entry than chasing the initial break. Stops go just below the retested level.
- Volume clues: light on the retest pullback, heavy on the resumption of the breakout direction.
- A retest that fails (price closes back inside the prior range) negates the breakout — honor your stop.
On the desk
Bitcoin breaks above $70,000 resistance on high volume, rallies to $74,000, then pulls back to $70,200 on declining volume. A bounce from $70,200 with bullish candles on the next day is the retest entry, stop at $69,500.