ORIGYN / USDTLong
The Descending Wedge pattern
The Descending Wedge pattern is a technical analysis chart pattern that indicates a potential reversal or continuation in a market trend. It is formed by two converging trendlines where the upper trendline is descending more sharply than the lower one. Here’s what it generally implies:
Structure:
Implications:
Key Points:
Breakout: The pattern is confirmed when the price breaks above the upper trendline. This breakout is often accompanied by increased trading volume, adding to the strength of the signal.
Target: The price target after a breakout is often estimated by measuring the widest part of the wedge and projecting it upwards from the point of breakout.
In summary, a descending wedge is typically seen as a bullish pattern that could lead to a significant price movement upwards once the resistance is broken.
Structure:
- Upper Trendline: Drawn through the highs of the price movement, sloping downwards.
- Lower Trendline: Drawn through the lows, also sloping downwards but at a less steep angle.
Implications:
- Bullish Reversal: In a downtrend, a descending wedge is often considered a bullish signal, suggesting that the downward momentum is weakening and a breakout to the upside might occur.
- Continuation Pattern: In some cases, especially during an uptrend, a descending wedge may act as a continuation pattern, signaling a temporary consolidation before the trend resumes.
Key Points:
Breakout: The pattern is confirmed when the price breaks above the upper trendline. This breakout is often accompanied by increased trading volume, adding to the strength of the signal.
Target: The price target after a breakout is often estimated by measuring the widest part of the wedge and projecting it upwards from the point of breakout.
In summary, a descending wedge is typically seen as a bullish pattern that could lead to a significant price movement upwards once the resistance is broken.
Note
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.