update 19 October 2021

Common BTC Price Chart Patterns Every Day Trader Should Know About

For several years now, market patterns have been used by expert crypto investors to maximize incomes. They do this by knowing the right time to enter the market. Crypto investors have also been beneficiaries of market chart patterns, with some identifying a position of great prospect and investing. 

Being the most popular asset with the highest volatility rate, Bitcoin has shown many different market patterns that can help investors maximize incomes. So what are the most common patterns in the BTC price chart? Keep reading to get more insight into the three most recurring patterns you should watch out for and how to benefit.

Common Bitcoin Chart Patterns

There are different chart patterns common in the Bitcoin price trends. These common patterns include:

  • Rising and Falling Wedge

Rising and falling wedges are among the most common chart patterns in the BTC prices, and once they form, they set ample income-making opportunities. So how do rising and falling wedges form, and are they prevalent in Bitcoin charts? 

Wedge charts patterns appear when two trend lines converge, meaning the price difference between the highs and lows is continually reducing. There are two types of wedge patterns, namely;

  • Rising 
  • Falling

A rising wedge is a pattern involving the converging of the resistance and support lines. On the other hand, a falling wedge is formed when there is a connection between the falling resistance and support lines. 

If a rising wedge comes up immediately after a long downtrend, it could signify that the market will continue at the same pace. At this point, any investors looking to buy bitcoin can wait for the further drop in prices before making any decisions. On the other hand, if the rising wedge comes after an uptrend, it signifies a reversal is coming. 

If it’s a falling wedge, there is a possibility of a reversal or a continuation in the charts. If the falling wedge is formed during a downtrend, then it will signify that an uptrend is coming soon, thus reversal. If it’s formed at the uptrend, it shows a possible continuation of the price patterns. 

Understanding the direction of the wedge and the possible outcome can help in making wiser investment decisions. For example, the image below shows a falling wedge. 

  • Double Tops and Double Bottoms

Double tops and bottoms are other widespread occurrences in the Bitcoin price charts. Double tops appear when the charts form a structure that looks like the letter M, with two consecutive peaks. 

The opposite of a double top is a double bottom. It occurs when the chart takes the shape of the letter W at the bottom of the chart. There must be two consecutive bottoms for the W shape to form, thus creating a double bottom. 

Generally, many investors have considered using double tops and bottoms as an excellent way of predicting the future of their investment options. Double tops and bottoms are very common, especially in the BTC market charts, and can help investors maximize their incomes. They lead to the bearish reversal that creates immense incomes for investors.

There must be an M and W shape in a double top or bottom system, but it’s not a must for the peak or the lowest point to be the same. These double tops have been occurring in the Bitcoin price charts, and investors using them can benefit if they know how to read them. 

  • Triangle Patterns 

Triangle patterns are perhaps the most common occurrences in the market’s charts of the BTC crypto asset. Since the launch of Bitcoin, Triangle patterns have appeared year after year, and if recognized well by investors, they can create vast incomes. 

Generally, a triangle pattern involves two lines, one touching the highest point of the resistance and another touching 3 points in the support level. For a true triangle to be formed, either the resistance or support must touch three points. Currently, there are three types of the commonly known triangle pattern, namely;

  1. Ascending triangles- These occur when resistance remains horizontal and flat and the support increases, sloping up. The low prices or the low supports are increasing with time. 
  2. Descending triangles- Occurs during a downtrend when the support is flat, but the resistance is continually dropping. 
  3. Symmetrical triangle– These occur when both resistance and support are converging towards each other. Typically, symmetrical triangle options occur when the market is unable to take one stand or direction. Symmetrical triangles are common in the BTC price charts, more than any other triangle pattern, and the image be

Final Word

After looking into the Bitcoin price charts, there are several repetitive patterns in the network. However, this guide has looked into some of the most common ones that investors should look out for. 

The rising and falling wedge are one of the popular patterns which have been seen to recur and can help investors make good decisions. It would signify a continuation of resistance depending on the wedge position and the direction before it. 

Another common occurrence is the double top and bottoms, which take the M and W shape in the charts. Regarding the double tops, sometimes there are triple tops; thus, it would be good if an investor would distinguish them. 

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Finally, there are triangle patterns, with the ascending triangles being the most common occurrence. Understanding these patterns and identifying them in market charts as in the images given above can help investors know the right time to invest.

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