Ten Chart Patterns for Crypto Technical Analysis

themonkii

Community Manager
Staff member
Jun 14, 2018
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I promised myself that this year as a NY resolution that I would improve my trading abilities....kinda skills up from a -1 to a +2, lol.

While browsing around last night, I found this, and thought I'd share it here as it does give you a few of the basic tools.

I wont copy/paste the full article, but you can continue on via the link at the bottom.

Trading cryptocurrencies doesn’t have to be guess work. Crypto prices often move in patterns. The patterns are formed due to a number of factors, including movement between support and resistance levels, market sentiment, and the emotional response investors have to certain price levels.

These patterns can many times predict what direction the price will go in the future, and can even help to predict price targets with a surprisingly high level of accuracy. The patterns can also help advanced traders understand where to place stop orders – a type of cryptocurrency exchange order type that sells an asset at a specified price once the price is reached – to avoid taking a loss, or to avoid missing out on a rally.

Covesting’s Crypto Intelligence portal is equipped with a number of resources for you to learn how to identify these patterns, including a Trade Ideas section with charts from top traders. To get you started, here are ten of the common patterns that can be identified in cryptocurrency price charts, and can help you become a more profitable cryptocurrency trader.

Bullish Patterns

Bull Flag
A bull flag occurs when sellers are overwhelmed by a strong break of resistance with volume from buyers that results in a long pole. Once the pole’s advance is broken, the flag forms, often tilting slightly downward. Bull flags can be seen both as a reversal pattern as well as a continuation pattern. The flag is comprised of price movement between two parallel trendlines until either trendline is broken – typically to the upside as bull flags are bullish chart patterns.



Ascending Triangle
Ascending triangles show strength from bullish buyers, as the buying pressure causes the price to form increasingly higher lows, creating an ascending lower trendline. The upper resistance trendline is flat, until it is finally broken toward the apex of the triangle.



Falling Wedge
In a falling wedge, a series of lower highs and lower lows are forming, creating a downward-sloping, wedge-like pattern as the range tightens and price consolidates. Falling wedges can form both as a continuation pattern and as a reversal pattern. However, a falling wedge forming at the bottom of a downtrend will typically signal a reversal, while a falling wedge during an uptrend usually signals a continuation. This makes the falling wedge a bullish pattern.

Bearish Patterns

Bear Flag
A bear flag occurs when buyers are overwhelmed by a strong break of support with volume from sellers that results in a long pole. Once the pole’s decline finds support, the flag forms, often tilting slightly upward. Bear flags can be seen both as a reversal pattern as well as a continuation pattern. The flag is comprised of price movement between two parallel trendlines until either trendline is broken – typically to the downside as bear flags are bearish chart patterns.

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