<p>Trendline break, in the realm of technical analysis, refers to a price movement that crosses through an established trendline, signaling a potential shift in the asset's direction.</p>

<h2>How It Works</h2>
<p>A trendline is a line drawn along the peaks or troughs of a price chart, indicating the direction of the prevailing trend. A break occurs when the price moves above a bullish trendline (uptrend) or below a bearish trendline (downtrend). This breach suggests that the previous trend may be reversing, and a new trend could be starting.</p>
<p>To confirm a trendline break, traders often look for a close above the trendline for a bullish break or a close below for a bearish one. Additionally, a <a href="/NewSite/encyclopedia/breakout/" class="ency-link">breakout</a> is usually accompanied by an increase in trading volume, indicating strong interest in the new trend.</p>

<h2>Why It Matters</h2>
<p>Trendline breaks are significant because they can signal the start of new trends, providing traders with potential entry and exit points for their positions. For instance, a bullish trendline break could indicate that a bearish market is about to reverse, presenting an opportunity for traders to buy the asset at a relatively low price.</p>
<p>Moreover, trendline breaks can help traders manage their risk. If a trader is holding a long position and the price breaks below a bullish trendline, it might be a sign to close the position or even go short, as the previous uptrend may have ended.</p>