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Descending Triangle

A descending triangle is a bearish technical chart pattern that is formed by drawing a horizontal support line along a series of equal or nearly equal lows, and a descending line that connects a series of lower highs.

The theory is that as the lines converge the range of prices contracts, building pressure in the market.

A break below the horizontal support line is considered a sell signal and traders will often aggressively short sell and asset when that line is broken, sending prices sharply lower.

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