When a rising channel breaks down, but prices rise up to tag it from below one last time before dropping further, we call that a backtest. Traditionally, it has represented a last gasp before a significant drop.
Over the past year or two, it’s often been a head fake. Prices often: (1) continue higher on the underside of the broken channel; or, (2) rejoin the broken channel and continue higher as though nothing ever happened.
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