• Ascending triangle patterns are one of the most popular chart indicators traders use.
• The pattern typically appears during persistent uptrends or downtrends and is seen as a continuation pattern.
• However, the ascending triangle is not always a bellwether for bullish continuation, particularly in bear markets.
An ascending triangle pattern is a very popular chart indicator used by traders to anticipate future market trends. This pattern is formed when a price consolidates between a rising trendline support and a horizontal trendline resistance. As its name implies, the price generally remains within a triangle shape when viewed on a chart. This pattern is typically seen in the midst of an uptrend or a downtrend, and is viewed by most technical analysts as a continuation pattern, meaning that the general market trend is likely to resume.
However, it is important to note that the ascending triangle is not always a reliable indicator of a bullish continuation, particularly during bear markets. This is best illustrated by looking at the Ether (ETH) price chart from 2018. During this bear market, an ascending triangle pattern formed on the chart, but this was followed by further downside. This shows that this pattern can also be used to predict bearish movements.
In terms of trading this pattern, traders should look for a break out from the triangle’s range to the upside. This is usually followed by a retest of the resistance trendline as support, which provides further bullish confirmation. If the price fails to break out of the triangle’s range, then traders should be aware that a bearish move could be likely.
Overall, the ascending triangle pattern is a popular indicator for traders to use, but it is important to note that it does not always mean the price will rally. It is always best to look at other indicators and patterns in order to make a more informed decision.