False Breakout

A false breakout occurs when price pushes beyond the boundary of an established acceptance range but the aggression that produced the break is not sustained. The move may look dramatic at first, yet subsequent candles fail to continue expanding away from the range.

Common evidence includes wicks extending beyond the boundary while bodies close back inside, or price getting through the boundary and then grinding back into the range within the next several candles. Instead of developing low-friction continuation, the breakout begins showing friction and overlap near the boundary.

The important distinction is that a simple boundary revisit is not automatically a false breakout. Genuine breakouts can return to the old boundary and resume. The breakout thesis becomes mechanically wrong when price returns deeply into the prior acceptance — specifically toward the mid-range wrong point defined by the framework. The label matters less than the behavior: did the break develop persistent expansion, or did the market return to the balance it was supposed to have left?