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Understanding chart patterns is one of the most valuable skills for any crypto trader. Whether you’re trading Bitcoin, ETH, or altcoins, recognizing these formations can help you predict trend reversals, spot entries, and exit trades before losses mount.
Here’s a detailed breakdown of 8 essential candlestick patterns that can help you make smarter, more confident trading decisions.
✅ 1. Double Low Pattern (W Formation) – Bullish Reversal
What it means: This pattern appears after a coin has been falling for a while.
Visual setup: Price hits a bottom (e.g. $22), bounces to $26, retests the same $22 zone, and then breaks above $26.
Why it matters: It signals that sellers are getting weaker, and buyers are starting to take over.
Confirmation: Wait for a strong close above the middle point (“neckline”) to confirm a potential uptrend.
❌ 2. Double High Pattern (M Formation) – Bearish Reversal
Occurs when: An asset has been trending up for a while.
Structure: The price peaks around $63, falls to $58, rises again to $63, then breaks down below $58.
Interpretation: Momentum is fading, and the bulls are losing control.
Trader tip: A breakdown below the neckline with volume often marks the beginning of a downtrend.
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📐 3. Gann Fan Indicator – Potential Bullish Setup
What is it: A technical drawing tool used to predict price direction based on time and price angles.
How to use: If price finds support near a lower fan angle (e.g., 3:1 or 4:1) and begins to bounce upward, it may indicate a bullish reversal.
Example: A coin retraces to $18 at the 4:1 line and then begins to rally — hinting at a potential price recovery.
Note: This works best when combined with volume or trend confirmation indicators.
⚠️ 4. Head and Shoulders Formation – Bearish Reversal Pattern
Appears after: A strong uptrend.
Pattern breakdown:
Left shoulder at $74
Head peaks at $81
Right shoulder at $75
Neckline around $70
Why it’s important: The inability to create a new high signals weakening demand. A break below the neckline often triggers selling pressure.
Pro move: Use stop-loss above the right shoulder for risk management.
🚀 5. Inverted Head & Shoulders – Bullish Trend Reversal
When it forms: After a long downtrend.
Pattern structure:
Left shoulder dips to $36
Head reaches $32
Right shoulder touches $35
Neckline resistance sits around $39
Meaning: Selling is slowing down, and buyers are gaining strength.
Trade setup: A strong breakout above the neckline could lead to a trend shift upward.
🏆 6. Triple Support Bounce (Triple Bottom) – Strong Bullish Indicator
How it looks: Price tests the same support (e.g. $20) three times but fails to drop lower.
Breakout point: Resistance around $23 gets broken, showing strong buyer interest.
Significance: Stronger than a double bottom — this shows that the market refuses to let the price drop further.
Tip: Watch volume on the breakout to confirm the pattern.
📉 7. Triple Resistance Rejection (Triple Top) – Bearish Pattern
What happens: The asset tests resistance three times (e.g. $46), then breaks down past a neckline (e.g. $42).
What it shows: Buyers are unable to push higher, and sellers begin to dominate.
Why it matters: Often marks the end of a bullish cycle and the beginning of downward movement.
Best use: Works well on daily charts or longer timeframes.
🔄 8. Resistance Becomes Support (RBS Flip) – Bullish Continuation
What is it: When a former resistance level turns into a support after being broken.
Example: Price breaks through $51 resistance, then comes back to test that level. If it holds and price bounces, it confirms a new bullish wave.
Why it’s useful: Confirms that the breakout was valid and not a fakeout.
Entry idea: Buy on the retest if the level holds with strong bullish candles.
📷 Want to See These in Action?
Use tools like TradingView (integrated with Binance) to spot these patterns in live charts. Combine them with indicators like RSI, volume, or moving averages to boost your trade accuracy.
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