🔺 Why does a triangle sometimes reverse instead of breaking out upward?

A triangle (symmetric or ascending) is considered a continuation pattern. But the market is alive, and instead of continuation, reversal often happens. Here are the main reasons:

1️⃣ Trend exhaustion
If the trend has already moved strongly (e.g., +50–100%), buyers simply run out of strength.

In this case, the triangle is not a “pause before growth” but a zone where big players start taking profits.

2️⃣ Liquidity buildup above the level

Above the upper boundary of the triangle, there are many short stop-losses.

Whales may create a “fake breakout” upward → collect liquidity → and then reverse the price down.

3️⃣ Divergence on indicators

If during the triangle formation RSI/MACD shows declining momentum (divergence), it’s a sign that growth is weakening.

In such cases, an upward breakout is almost always fake.

4️⃣ External factor (news, $BTC )

If Bitcoin is correcting at that moment, altcoins almost always break triangles downward, even if there was a local bullish structure.

5️⃣ “Reversal triangle”

When it forms at the top of a trend (after a long rally), it’s no longer a continuation pattern but a distribution.

This means “strong hands” are leaving the market while retail traders are still trying to buy.

📌 Conclusion:

Not every triangle leads to trend continuation. Always check:

where it forms (middle or top of the trend),

what volume shows,

and whether divergence is present.

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