Bitcoin

After a level break, a “primary impulse" appears. This impulse is created by short players (since their stops placed there) and new buyers who saw a breakdown, as well as robots, catching such patterns - primary impulses. The price rests in the zone where placed some huge number of limit orders. On BTC it's near $10400. This zone absorbed the momentum. And then we saw that the price didn't remain at this level, and the price immediately went down to the level. Those it could be assumed that the seller leveled all the energy of growth. Everyone who wanted to buy above the level was already stuck in purchases and couldn't move the market higher.
Therefore, when you roll back to the level, the self-preservation reflex immediately turns on - "Is it a false breakdown?".

Well, when the price creeps under the level, where for the most part the stops of new buyers are already placed, it's not far off to expect a possible strong downward movement.

Similarly, consider short squeeze, when shorts are waiting for a fall, the price rises above the level, sellers' stops work, an upward momentum appears and then the strait down, etc..
Generally, many books have been written about false breakdowns which you can find for free.
just now

Best regards EXCAVO

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