NEW! We now offer price & volatility alerts for over 10,000 Stocks & ETFs!
A crypto trader's guide to common chart patterns.
What are chart patterns?
The price chart of a crypto asset often exhibits repeating trends and patterns over time. Many traders use this information to help predict what the price might do next. While there are many techniques and competing ideologies that go into the field of technical analysis, nearly every trader recognizes the use of chart patterns in some shape or form. Let's go over some of the most common classical chart patterns used by bitcoin and crypto traders.Cup & Handle
The Cup and Handle is a very common bullish pattern that is also easy to recognize. It consists of a U-shaped cup followed by a smaller dip known as the handle. As with every pattern, these trends represent collective market psychology. In this instance, the "handle" occurs due to investors who bought the previous high (when the pattern started). These people immediately lost money on their investment and are excited to simply break even. The rising price at the end of the handle signals to prospective traders that the sellers have exhausted themselves, and that there is still enough buying pressure to break through to a new high.![Cryptocurrency Alerting (2) Cryptocurrency Alerting (2)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/cup-and-handle.png)
Ascending Triangle
The ascending triangle pattern is also very common, and it takes the form of the asset's price repeatedly bumping up against an invisible line of resistance. Each time the price dips lower, it does so less and less (this is known as making higher lows). Each time a line of resistance is tested, it becomes more likely that it will be broken. This eventually communicates to investors that the price will shoot upward if the pattern resolves itself.![Cryptocurrency Alerting (3) Cryptocurrency Alerting (3)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/ascending-triangle.png)
Symmetrical Triangle
![Cryptocurrency Alerting (4) Cryptocurrency Alerting (4)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/symmetrical-triangle.png)
Descending Triangle
![Cryptocurrency Alerting (5) Cryptocurrency Alerting (5)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/descending-triangle.png)
Head & Shoulders
This pattern can be a little tricky to spot at times. A head and shoulders pattern can often be a little lopsided where the shoulders are not level with each other. The shoulders can also be riddled with wicks (see: how to read candlestick charts) making them easy to miss. However, this is a powerful pattern that can be very profitable to spot.![Cryptocurrency Alerting (6) Cryptocurrency Alerting (6)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/head-and-shoulders.png)
![Cryptocurrency Alerting (7) Cryptocurrency Alerting (7)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/inverse-head-and-shoulders.png)
Falling Wedge
![Cryptocurrency Alerting (8) Cryptocurrency Alerting (8)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/falling-wedge.png)
Rising Wedge
![Cryptocurrency Alerting (9) Cryptocurrency Alerting (9)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/rising-wedge.png)
Double Top
A double top is exactly what it sounds like, and it makes a lot of sense from a market psychology perspective. After reaching an all-time-high (or maybe just a local-high), there was enough momentum to test that price a second time. But enough sellers showed up to knock the price back down, signaling that the price rally could be over. Triple tops, while less common, do occur as well.![Cryptocurrency Alerting (10) Cryptocurrency Alerting (10)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/double-top.png)
Double Bottom
A double bottom pattern is a bullish version of a double top. It's worth noting that both bottom prices don't need to line up perfectly, and wicks are frequently ignored when it's convenient. When looking at a candlestick chart, a wick is a brief price anomaly, and can often be safely omitted when charting price patterns.![Cryptocurrency Alerting (11) Cryptocurrency Alerting (11)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/double-bottom.png)
Bear Flag
A bear flag is a very common continuation pattern. After a move downward, the price will often consolidate in a range, appearing to recover slightly, but will not show enough strength to break out from this range in an upward direction. This signals to traders that the selloff has not concluded, and the march downward will continue.![Cryptocurrency Alerting (12) Cryptocurrency Alerting (12)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/bear-flag.png)
Bull Flag
A bull flag is an inversed bear flag.![Cryptocurrency Alerting (13) Cryptocurrency Alerting (13)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/bull-flag.png)
Pennant
This pattern resembles a flag pole, which is where it got its name. It is essentially the same as a flag pattern, but the consolidation phase resembles a symmetrical triangle rather than a parallel trend line. This too, is a continuation pattern.![Cryptocurrency Alerting (14) Cryptocurrency Alerting (14)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/pennant.png)
Bart Pattern
![Cryptocurrency Alerting (15) Cryptocurrency Alerting (15)](https://i0.wp.com/cryptocurrencyalerting.com/assets/img/chart-pattern/bart.jpeg)
Wrapping Up
A solid understanding of price chart patterns can help give traders an edge. They can help determine investor sentiment, as well as smart places to enter and exit markets. But of course, there is a lot more to trading than reading chart patterns.More Resources
- Learning about Crypto Stats
- BitMEX Terminology
Create customizable crypto alerts.
We are currently undergoing maintenance. We will be back online shortly.
Notification Limit Reached You've reached the notification limit for the Hobby tier. Upgrade to get unlimited notifications.
Billing History
There is no billing history tied to this account. Recent payments may take up to 24 hours to appear.
Via Coinbase View Invoice