When you look at your cryptocurrency graph, you might have noticed a pattern on the price chart. If you’ve noticed one of these patterns, you can use this information to predict the next market move. There are three main types of crypto chart patterns: the double top, triple top, and bottom. Double patterns are reversal patterns and are formed when the price breaks through a previous resistance level and then quickly rises back up. This type of pattern usually represents a stronger reversal than a single top or bottom.
Support and resistance levels are the most basic concepts in the crypto price charts. As markets change over time, there are areas where prices pullback and bounce back from downward movements. When prices return to the same level repeatedly, they strengthen their support or resistance level. During a high-volatility period, if these bands separate, that means a trend is ending, and if they are close together, they’re due for another spike in volatility.
An ascending triangle pattern occurs when price repeatedly bumps up against an invisible line of resistance. As the price continues to rise, its dips become less frequent, forming higher lows. Eventually, the price will break through the line of resistance and shoot higher. However, as with any pattern, it usually doesn’t finish before the breakout. So, if you want to trade using this pattern, you need to wait until the entire chart pattern forms before you attempt to take profit.
When you’re analyzing your cryptocurrency chart, you should look for candlesticks that describe price action. If you’re an intra-trader, you should look for H4 and daily candles. Often, these two time frames will be in perfect harmony, forming a signal that is profitable for you. You can also use a reversal candlestick, which shows a sudden decline from a bullish point.
In addition to triangles, you should look for descending triangles. These patterns are very common and are the bearish version of an ascending triangle. When a descending triangle forms, it will be tested again until it no longer holds. During this time, traders will jump into the trade, putting a stop loss level at a low point. However, a bearish descending triangle almost always resolves in a bearish breakdown, signaling weak interest in crypto.
Another pattern that is useful in the crypto world is the ascending triangle. Ascending triangles indicate a continuation of a bullish trend. The breakout of an ascending triangle signals a significant increase in volume and price. A bullish ascending triangle usually shows a rising crypto price, with a resistance level at the top. Higher lows indicate momentum building. And when this pattern forms, the price starts to narrow in a point.
If you are new to crypto, you can learn how to interpret these patterns with the help of tools such as trend lines and Moving Averages. PrimeXBT also has a signal account that enables you to trade with minimal risk and with the protection of your capital. If you’re not sure what to look for, you can even download a free app that helps you analyze the crypto chart patterns in real time. However, you need to know that these methods are only good for educational purposes and are not intended to offer financial advice.