A lower-highs trendline breakout occurs when price has been making a series of lower highs—showing sellers are consistently pushing the market down—but then the price finally closes above that descending trendline. This breakout signals that the selling pressure is weakening and buyers are gaining control. When the candle closes decisively above the trendline, it indicates a potential trend reversal from downtrend to uptrend or at least the start of a bullish corrective phase. Traders often look for follow-through buying or a retest of the broken trendline to confirm the breakout before entering a long trade.