Technical Analysis of Bitcoin Charts – The Most Common Patterns

Technical Analysis of Bitcoin chartsWhen you intend to become a successful Bitcoin or Cryptocurrency trader it is crucial that you have an idea about technical analysis. For instance, you have to know all common chart patterns which are repeated frequently in the Bitcoin and altcoin charts. Chart patterns are specific candlestick formations, consisting of many candlesticks, building conspicuous figures in the chart. Those patterns help you to estimate the likelihood of a certain market behavior in the near future.

There Are Different Groups Of Chart Patterns:

Bullish patterns indicate the likelihood of an ongoing uptrend. Bearish patterns signal that the price is relatively likely to move further downwards. The third group are the reversal patterns: Those few well known chart patterns often signal that the predominant trend is ending and you can expect a price breakout in the opposite direction.

The well-known chart patterns occur on all time frames. So you will find the below mentioned patterns in one-minute charts as well as in daily charts.

Download Chart Patterns Cheatsheet

Although those patterns are absolutely no guarantee for a certain market behavior, it is still fact that the likelihood for the expected market move is significantly higher than the opposite behavior.

Basically chart analysis can be used to create your trading plan in advance. Meaning that you should have a plan in advance, based on the analysis, where to set your orders, dependently from what you expect the market to do soon.

Professional traders use chart patterns together with the so called Fibonacci retracements, among other analysis tools. This kind of chart analysis must be seen in the same way as the pattern analysis: They indicate the likelihood for certain reversals and breakouts of price. The indicators give you an idea where you should put your targets in advance, for instance to set profitable sell orders at points which are most likely going to be hit. Of course there is never a guarantee for certain price action, but successful traders work with likelihoods Рand being right in more than 50% of cases is enough to make money.

The 3 Groups of Common Chart Patterns

Bullish Patterns (price going up)

flagpennantmeasured-move-upsymmetrical-triangle-uptrendascending-scallop3 rising-valleyscup-with-candleascending-triangle

  • Flag
  • Pennant
  • Measured move up
  • Symmetrical triangle
  • Ascending scallop
  • 3 rising valleys
  • Cup with Handle
  • Ascending triangle

Bearish Patterns (price going down)

symmetrical-triangle3 descending-peaksdescending-scallopdescending-triangleflag-downtrendinverted-cup-with-candlemeasured-move-downpennant-downtrend

  • Symmetric triangle
  • 3 descending peaks
  • Descending scallop
  • Descending triangle
  • Flag
  • Invertede Cup with handle
  • Measured move down
  • Pennant

Reversal Patterns

head and shoulderstops-rectangledouble-bottomsdiamond-bottoms

  • Head and shoulders top
  • Tops rectangle
  • Double bottoms
  • Diamond bottoms

So when you are looking at the crypto charts or the graphs of any other tradable asset, you should be able to identify those patterns immediately. Just take a moment to learn how they look like, you’ll quickly get familiar with those patterns – especially when you start to recognize them in the real price movements.

Real Chart Examples:

Bullish Ascending Triangle:

3 Bearish Tops:

Bullish Cup and Handle:

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