Bullish chart patterns are important patterns every trader needs to know. The crypto market is currently one of the most unforgiving markets to trade in. However, proper trading skills are one of the most important assets any trader can have.
Despite the current bear market, knowing how to navigate the crypto market properly, read charts, and interpret them can prove to be valuable bits of knowledge for veteran and new traders alike.
Knowing how to enter trades and which trade setups to stay away from can be very helpful for becoming profitable as a trader.
Identifying and using the right trading patterns is one of the most important skills a trader can possess. The crypto market is a highly volatile one. This means that the prices fluctuate quickly, and only the prepared make it out.
Below are some of the chart patterns traders should be aware of.
As illustrated above, bitcoin's price action printed an ascending channel from late 2020 to 2021, leading up to the $65,000 all-time high, later in the year around November.
Ascending triangles consist of a trendline on their lower part, guiding the price of a cryptocurrency to the upside. On the top of the ascending triangle, we have a relatively flat trendline acting as the resistance.
A breakout from this flat upper trendline is a strong buy signal for a trader and can lead to massive bullish returns if traded with skill and patience.
The falling wedge is a bullish chart pattern that occurs when an asset's trend is bullish, and a correction occurs. These corrections often bring the price of the asset lower as prices consolidate.
However, the consolidation often ends when the price action of the cryptocurrency breaks above the upper resistance of the falling wedge and continues its trajectory upwards, as illustrated in the chart above.
The falling wedge is not a common pattern but can be a perfect indicator of massive bullish gains.
Bullish rectangles are sometimes called sideways channels. They consist of the price action of an asset being bounded on either side by two relatively flat trendlines.
Bullish rectangles are relatively easier to recognize compared to other kinds of patterns.
On breakout from the upper resistance, traders can take trades and ride the trend to the upside for its bullish returns.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)