Understanding the Descending Triangle Chart Pattern

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On the internet, there are numerous chart patterns to choose from. Heads shoulders, broadening wedge, bull flag, triple bottom top, bullish, bearish pennant, support resistance, consecutive candles, butterfly, ABCD, channel up-down, double bottom top, rectangle, big movement, drive, Gartley, 3-point extension, 3-point retracement, and many others are just a few examples. You will see these patterns over the internet. Some only use photos to demonstrate it. It is also difficult to discuss all of these patterns in one sitting. As a result, we will only cover one pattern in this article: the Descending Triangle Chart Pattern.

According to Investopedia, a descending triangle is a bearish chart pattern made by drawing one horizontal trend line that connects a series of lower highs and a second horizontal trend line that connects a series of lows. Traders often look for a move below the lower support trend line since it indicates that downward momentum is starting to build, and a breakdown is approaching. Traders establish short positions and aggressively help push the asset’s price further lower if the collapse happens.You can access these trading positions in crypto trading platforms such as Bitcoin Pro

When most traders hear the term descending triangle, they immediately think of a bearish market. In some circumstances, yes, but not all. The descending triangle has the potential to be both bullish and bearish. Just because you see a falling triangle on a chart does not guarantee the market is bearish. Consider other aspects as well to confirm your hypothesis. When a descending triangle appears in a bull market zone, there is an 84 percent possibility of an upward break out. There is a 61 percent possibility of a downward breakout if a descending triangle forms in a bear market.

On the other hand, if you see and feel three descending triangles on a chart, two of them are possible downward breakouts, and one is an upward break out. It is also possible that there will be no breakout. A descending triangle has a downsloping top and a horizontal trendline at the bottom. The volume of the triangle recedes or diminishes as it forms. It appears to be quieting down and building strength in preparation for a drastic price inclination or decline.

In a descending triangle upward break out, we can see on a chart that the price starts to leave a price range in a specific period. The price breaks out of its recent pattern and rises. At the same time, its volume decreases over time. As the breakout progresses, the volume steadily rises as well. In a descending triangle, there are moments when whipsaw or false break out occurs. It happened to Bitcoin in 2017 during a bull market. Even though there was a false breakout and many traders panicked, the price of Bitcoin continued to soar.

This pattern is only one of the many chart patterns that traders study. It occurs in all time frames. This pattern only intends to serve as a guide. It has the potential to move upward, downward, or even sideways. Use other indicators to strengthen your assumption before entering and exiting the trade. However, when employing indications, you must be cautious. If you utilize it too much, you can experience what’s known as technical analysis paralysis. Traders are prone to overthinking in this situation. They are unsure what action to take because there are too many clues. That is because indicators provide you with go and stop signs. Because indicators might send contradictory indications, having a sufficient number of them is critical.

For novice traders who do not want to experience such, they choose to consult professional crypto traders to assist them in making trading decisions. Bitcoin Pro is a venue for those looking for competent brokers around the globe. If you also want to test the waters first, you may try this platform. Because Bitcoin Pro recognizes the public’s rising desire to trade in cryptocurrencies, they created a platform that integrates a suite of cutting-edge tools to assist you in achieving your trading goals.

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