Patterns – Earlybirds Invest https://earlybirdsinvest.com Latest Crypto News Sun, 31 Aug 2025 04:37:46 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.7 https://i0.wp.com/earlybirdsinvest.com/wp-content/uploads/2024/12/cropped-New-Project-2024-12-17T235703.455.png?fit=32%2C32&ssl=1 Patterns – Earlybirds Invest https://earlybirdsinvest.com 32 32 240146708 Bitcoin signals uptrend resumption in late September based on holding patterns https://earlybirdsinvest.com/bitcoin-signals-uptrend-resumption-in-late-september-based-on-holding-patterns/ https://earlybirdsinvest.com/bitcoin-signals-uptrend-resumption-in-late-september-based-on-holding-patterns/#respond Sun, 31 Aug 2025 04:37:46 +0000 https://earlybirdsinvest.com/bitcoin-signals-uptrend-resumption-in-late-september-based-on-holding-patterns/

Bitcoin (BTC) holding patterns suggest a potential resumption of the uptrend starting in late September 2025, as long-term accumulation data reveals evolving market dynamics driven by institutional adoption and policy catalysts.

CryptoQuant Korean Community Manager Crypto Dan’s analysis reveals that the current cycle differs from previous bull markets due to extended timeframes and flattening momentum slopes.

The percentage of Bitcoin held for over one year based on realized market cap demonstrates the current cycle’s unique characteristics compared to previous phases.

Unlike past cycles, where sharp surges led to rapid peaks, institutional adoption through spot exchange-traded funds (ETFs) and nation-state purchases has extended the bull market’s duration while gradually flattening the uptrend’s slope.

Market momentum faces periodic stalls when capital flows shift toward altcoins, a pattern that has repeated multiple times during the current cycle. It contrasts with 2023-2024, when Bitcoin dominated market attention before capital began migrating to alternative cryptocurrencies.

Favorable backdrop

Crypto Dan noted that September rate cut expectations align with Bitcoin’s seasonal patterns and technical indicators.

Polymarket traders currently place 81% odds on a 25 basis point Federal Reserve rate cut at the September FOMC meeting, providing a potential catalyst for risk asset appreciation.

The analysis also anticipates additional momentum from the expected approvals of altcoin ETFs in October.

Bloomberg ETF analyst James Seyffart stated in April that most crypto ETF applications face final deadlines in October, making it the likely approval month for spot altcoin products.

This timeline creates a favorable policy window for crypto markets as they enter the fall season.

Combined with seasonal patterns that show Bitcoin’s strength in autumn months, the convergence of dovish monetary policy and regulatory clarity positions the market for renewed upward momentum following the current consolidation phase.

Extended cycle characteristics

Institutional adoption fundamentally altered Bitcoin’s cycle dynamics compared to the retail-driven phases that preceded it.

The introduction of spot ETFs and corporate treasury adoption created more stable demand flows but extended the cycle’s duration. The analysis suggested these structural changes support sustained bull market conditions despite periodic consolidation phases.

Given the favorable policy backdrop and development of institutional infrastructure, any additional corrections during the transition period could present attractive opportunities for accumulation.

The combination of rate cuts, ETF approvals, and seasonal factors supports an optimistic market outlook for fall and winter 2025.

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Is Ethereum at risk? Analysts warn of repeated weekly liquidation patterns https://earlybirdsinvest.com/is-ethereum-at-risk-analysts-warn-of-repeated-weekly-liquidation-patterns/ https://earlybirdsinvest.com/is-ethereum-at-risk-analysts-warn-of-repeated-weekly-liquidation-patterns/#respond Wed, 27 Aug 2025 07:11:31 +0000 https://earlybirdsinvest.com/is-ethereum-at-risk-analysts-warn-of-repeated-weekly-liquidation-patterns/

Ethereum (ETH) recently hit a new all-time high of over $4,900 before undergoing an amendment. As of now, assets are trading at $4,520, reflecting an 8.9% pullback from the peak, but up 7.6% last week.

The move follows a strong upward momentum over the next few weeks that returned ETH to an invisible price level since the 2021 Bull Cycle. While Ethereum’s long-term trend continues to rise, analysts are considering short-term patterns to explain the current volatility of the market.

One such perspective comes from Xwin Research Japan, a contributor to Cryptoquant’s Quicktake platform, and highlights how the liquidation cycle is repeated, especially the ETH price action early every week.

Related readings

Ethereum’s “Monday Trap” and the risk of excessive leverage

Analysis shows that the markets utilized by Ethereum show a recurring rhythm associated with liquidation events. Taking advantage of long positions, betting that prices will continue to rise, often getting caught up in a sudden reversal, forcing liquidation that amplifies downward movement.

In April and June 2025, ETH saw a long liquidation of more than 300,000 ETH in a day, as a sharp decline caused the sale of Cascade. Xwin Research Japan pointed out an impressive weekly pattern. Monday consistently showed the highest liquidation volume, followed by Sunday and Friday.

Ethereum Weekly Long Liquidation.
Ethereum Weekly Long Liquidation. |Source: Cryptoquant

In contrast, Saturday will likely record the lowest due to a decline in market activity. Often referred to as “Monday Trap,” this cycle suggests that traders carrying leveraged positions from the weekend are particularly vulnerable when institutional and retail streams reenter early in the week.

“It’s dangerous to bring weekend optimism to Monday’s massive sessions,” the analyst observed, emphasizing that short-term leverage will increase losses in a predictable way.

For long-term investors, this cycle is not about price direction, but about understanding the risks of excessive leverage in highly liquid markets.

Technology level and broader market outlook

From a technical standpoint, Ethereum price adjustments are being closely monitored. Market analysts recently known as Crypto Patel Posted At X, its ETH has been raised from $4,957 to $4,400, focusing on $3,900-$4,000 as a strong support zone.

According to Patel, keeping this level could pave the way for a higher price range of $6,000-8,000. However, if the support is damaged, a $3,500 or $3,200 minus side level is still possible.

The interaction between utilized liquidation and key technical support levels may define the trajectory of Ethereum in the coming months. Historical data shows that large outflows from exchanges often precede sustained gatherings, while inflows indicate normal sales pressure.

Related readings

ETH’s recent Exchange Netflow data is leaning towards leaks, suggesting that investors are independent of the coin.

At the same time, institutional demand for Ethereum continues to be strengthened, strengthened by continuing debate on ensuring integration within regulated financial instruments such as ETFS.

Ethereum (ETH) TradingView Price Chart
ETH prices move upwards on a two-hour chart. Source: eth/usdt on tradingview.com

Special images created with Dall-E, TradingView chart

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Hackers Attack Android Users’ Bank Accounts As Rapidly Improving Malware Steals PIN Codes and Login Credentials, Unlocks Patterns and Records Screens: Cybersecurity Researchers https://earlybirdsinvest.com/hackers-attack-android-users-bank-accounts-as-rapidly-improving-malware-steals-pin-codes-and-login-credentials-unlocks-patterns-and-records-screens-cybersecurity-researchers/ https://earlybirdsinvest.com/hackers-attack-android-users-bank-accounts-as-rapidly-improving-malware-steals-pin-codes-and-login-credentials-unlocks-patterns-and-records-screens-cybersecurity-researchers/#respond Sat, 02 Aug 2025 08:37:13 +0000 https://earlybirdsinvest.com/hackers-attack-android-users-bank-accounts-as-rapidly-improving-malware-steals-pin-codes-and-login-credentials-unlocks-patterns-and-records-screens-cybersecurity-researchers/

A rapidly evolving bank malware now has far greater capabilities to infect Android devices and steal personal information, according to researchers.

The cybersecurity firm Zimperium says the so-called DoubleTrouble trojan “has rapidly evolved in both its distribution methods and capabilities,” and is now permeating channels on the social platform Discord.

“In its latest evolution, the malware has integrated several new and advanced features, significantly expanding its capabilities beyond earlier iterations. These enhancements enable more effective data theft, device manipulation, and evasion techniques.

The new functionalities include: displaying malicious UI overlays to steal PIN codes or unlock patterns, comprehensive screen recording capabilities, the ability to block the opening of specific applications, and advanced keylogging functionality.”

Researchers say the malware convinces users to download it by masking itself as an extension or an add-on, and it uses the Google Play icon to appear trustworthy.

It also manipulates device functionality by exploiting Android’s Accessibility Services, allowing it to block legitimate banking or security apps with misleading “system maintenance” prompts.

In addition, the malicious software simulates user actions like taps and swipes, allowing attackers to remotely control infected devices and steal data, including passwords and banking details, with alarming precision.

The trojan’s attacks are ongoing, primarily targeting users in Europe through phishing websites and Discord-hosted APKs. Specific victim counts remain unknown at time of publishing.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Solana Price Prediction: Experts See SOL Hitting $300 Before August Amid Bullish Chart Patterns https://earlybirdsinvest.com/solana-price-prediction-experts-see-sol-hitting-300-before-august-amid-bullish-chart-patterns/ https://earlybirdsinvest.com/solana-price-prediction-experts-see-sol-hitting-300-before-august-amid-bullish-chart-patterns/#respond Sun, 13 Jul 2025 21:36:02 +0000 https://earlybirdsinvest.com/solana-price-prediction-experts-see-sol-hitting-300-before-august-amid-bullish-chart-patterns/

Crypto Journalist

Anas Hassan

Crypto Journalist

Anas Hassan

About Author

Anas is a crypto native journalist and SEO writer with over five years of writing experience covering blockchain, crypto, DeFi, and emerging tech.

Last updated: 


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Solana(SOL) is back at it, showing renewed strength after successfully breaking the $160 resistance level for the second time within the past three months.

Currently trading at $163.43, SOL has gained 12.87% over the last 30 days, commanding an $87.65 billion market capitalization that has solidified its position as the sixth-largest cryptocurrency in the market.

Analysts now believe the recent price action mirrors the $125 breakout witnessed in April, which subsequently led to a $187 peak in May. The current projection targets $300 before August.

Solana Becomes TradFi Internet Layer With PumpFun ICO $500M Liquidity Dominance

Beyond bullish chart patterns, Solana continues to serve as a liquidity hub, with protocols built on its infrastructure showcasing compelling use cases and competitive advantages over other layer-1 blockchains.

For instance, the popular memecoin launchpad PumpFun conducted its ICO on July 12, with more than 70% of participants securing spots in the highly contested FCFS distribution through direct Solana chain interaction.

This event raised over $500 million via on-chain wallets, while only $100 million was recorded from centralized exchanges due to investors struggling to process their transactions efficiently.

This development has further reinforced Solana’s edge as the internet layer for traditional finance and capital markets.

Similarly, the popular Solana-based NFT mascot Pudgy Penguin has attracted attention from top industry players, with notable figures including VanEck, Coinbase, Moonpay, and even Tron founder Justin Sun featuring the PENGU profile picture.

With the first-ever Solana ETF now live in the United States and additional ones in the pipeline, analysts like Ali Charts believe SOL’s breakout will target the $185 immediate resistance level.

Popular crypto trader “Crypto Dubzy” also shared his analysis, projecting $194 as the next target if the $195 resistance is breached, with expectations for the $257-$305 levels to follow.

With Solana’s open interest in the derivatives market surging past $8.15 billion and funding rates remaining positive, these targets appear well within reach.

Solana Price Prediction: Experts See SOL Hitting $300 Before August Amid Bullish Chart Patterns

SOL Weekly EMA89 Reclaimed — Next Fibonacci Stop at $252

On the technical front, the weekly chart for SOL/USDT displays a potential bullish reversal now that price has reclaimed and is trading above the 89-week EMA, which serves as a significant long-term trend indicator.

Following a prolonged correction from the $295 high, SOL found support around the 0.236 Fibonacci retracement level near $142 and has since rebounded with increasing volume.

Solana Price Prediction: Experts See SOL Hitting $300 Before August Amid Bullish Chart Patterns

The recent price breakout above both the EMA89 and a multi-week consolidation pattern suggests growing momentum.

Should bullish continuation persist, the next potential resistance zones align with Fibonacci levels—first at $171 (0.382), followed by $195, $219, and a possible retest of $252 if momentum accelerates.

Given the recovery of key moving averages and the structural shift, the outlook favors an upward trajectory toward the $200–$250 range, provided SOL maintains levels above the $145–$155 support band.

Snorter Bot Provides Early Access To Solana Memecoin Sniping Tool

For traders seeking to capitalize on Solana’s performance, one common strategy involves purchasing Solana memecoins when SOL demonstrates strong price action.

However, most of these tokens are not easily accessible except through direct interaction with the Solana chain.

Professional traders and DeFi participants often resort to using Telegram trading bots to snipe these memecoins, particularly on platforms like pump.fun and the newly launched BonkFun.

One trading bot gaining traction among users is the Snorter bot.

Solana Price Prediction: Experts See SOL Hitting $300 Before August Amid Bullish Chart Patterns

What makes it particularly appealing is its Solana-based infrastructure and its native token $SNORT, offered as a memecoin for investors to purchase.

Within just a few weeks since its presale launch, Snorter Bot (SNORT) has successfully raised over $1.6 million, demonstrating significant investor interest.

SNORT is currently priced at $0.0981 per token during the ongoing presale round, offering early investors the opportunity to participate before the price increases.

Interested participants can join the presale via the official Snorter presale website, using popular cryptocurrencies or bank cards to complete their purchase.


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Patterns Break as Both Short and Long Term Holder Cohorts Accumulate Bitcoin https://earlybirdsinvest.com/patterns-break-as-both-short-and-long-term-holder-cohorts-accumulate-bitcoin/ https://earlybirdsinvest.com/patterns-break-as-both-short-and-long-term-holder-cohorts-accumulate-bitcoin/#respond Wed, 09 Jul 2025 13:51:10 +0000 https://earlybirdsinvest.com/patterns-break-as-both-short-and-long-term-holder-cohorts-accumulate-bitcoin/

As bitcoin

continues a now multi-week consolidation just below its all-time high of $112,000, an interesting accumulation phenomenon is occurring.

Both short-term and long-term holders have been increasing their stacks as distinct cohorts, which is unusual because these groups typically act in opposite directions, according to Glassnode data.

jwp-player-placeholder

The chart below from Glassnode illustrates the 155-day threshold used to classify coins as belonging to Long-Term Holders (LTH) or Short-Term Holders (STH).

Since June 22, the LTH supply has increased by 13,000 BTC, returning to an all-time high of 14,713,345 BTC. Meanwhile, over the same period, STHs have grown their BTC supply by more than 60,000 BTC and now hold over 2.3 million BTC.

According to Glassnode data, LTH and STH cohorts usually diverge because LTHs often sell into bull market strength, while STHs tend to buy amid market greed and euphoria.

This alignment suggests that both groups of market participants are expecting higher prices. If both cohorts continue increasing their supply, there is a strong possibility that all-time highs will be surpassed.

Long/Short Term Holder Threshold (Glassnode)

Long/Short Term Holder Threshold (Glassnode)

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FTC approves $126 million in Fortnite refunds over ‘dark patterns’ https://earlybirdsinvest.com/ftc-approves-126-million-in-fortnite-refunds-over-dark-patterns/ https://earlybirdsinvest.com/ftc-approves-126-million-in-fortnite-refunds-over-dark-patterns/#respond Thu, 26 Jun 2025 22:07:36 +0000 https://earlybirdsinvest.com/ftc-approves-126-million-in-fortnite-refunds-over-dark-patterns/

Fortnite

The Federal Trade Commission (FTC) has approved $126,000,000 in refunds to be sent to 969,173 Fortnite players as part of a settlement over allegations that Epic Games tricked users into making unwanted purchases.

At the same time, the agency has reopened the claims portal for eligible Fortnite players to submit refund claims, which will be examined for the third round of refunds.

This latest development marks the second phase of the settlement the FTC reached with Epic Games in December 2022, in which the company agreed to pay $520 million to settle allegations of violating children’s privacy laws and using dark patterns to trick millions into making unintentional in-game purchases.

These so-called patterns included:

  • Displaying confusing purchase prompts
  • Promoting misleading offers
  • Allowing underage account holders to make purchases without parental consent
  • Charging players unintentionally by waking the game from sleep mode, during the loading screen, or while they attempted to preview an in-game items

These charges occurred without additional confirmation, and those attempting to dispute and reverse them had to go through a complex process that made it likely for them to give up prematurely.

In some cases, these users were blocked from accessing their very accounts before the payment was reversed.

The first round of refunds occurred in December 2024, during which $72,000,000 was distributed among 629,344 eligible Fortnite players.

The average reimbursement in the first round was $114, while in the second, the figure has been raised to $130.

As previously happened, consumers whose reimbursement claims have been approved will be given 90 days to cash their checks or 30 days if they opt to use PayPal as the redemption method.

A dedicated phone line and support email were also set up by Rust Consulting Inc., which handles the refund process.

If you have performed Fortnite purchases between January 2017 and September 2022 that fall into the category of ‘dark patterns’ as those were defined by the FTC, you are invited to submit a claim through this portal until July 9, 2025.

Claimants must be at least 18 years old to complete a claim form. However, parents or guardians can do it on their behalf.

More information about FTC refunds in general is available on this FAQ page.

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XRP Price Coiled for a Significant Move as Key Volatility Indicator Mirrors 2024 Patterns https://earlybirdsinvest.com/xrp-price-coiled-for-a-significant-move-as-key-volatility-indicator-mirrors-2024-patterns/ https://earlybirdsinvest.com/xrp-price-coiled-for-a-significant-move-as-key-volatility-indicator-mirrors-2024-patterns/#respond Sun, 20 Apr 2025 16:39:14 +0000 https://earlybirdsinvest.com/xrp-price-coiled-for-a-significant-move-as-key-volatility-indicator-mirrors-2024-patterns/

The price action for XRP and bitcoin (BTC) resembles a tightly compressed spring on the verge of uncoiling with a sudden release of energy.

That’s the message from a key volatility indicator called Bollinger Bandwidth. Bollinger Bands are volatility bands set at plus two and minus two standard deviations above and below the 20-period moving average (SMA) of an asset’s market price. The bandwidth measures the space between these bands as a percentage of the 20-day moving average.

XRP and BTC with Bollinger bandwidth. (TradingView/CoinDesk)

XRP and BTC with Bollinger bandwidth. (TradingView/CoinDesk)

In the case of XRP, the Bollinger bandwidth has narrowed to its lowest level since October 2024 on the 4-hour chart, where each candle represents price action for a four-hour period. The 4-hour chart interval is quite popular in the 24/7 crypto market, allowing traders to analyze and predict short-term price movements. Bitcoin’s 4-hour chart mirrors the Bollinger band width pattern in XRP.

The long-held belief is that a tighter Bollinger band width, reflecting a quiet period in the market, is akin to a compressed spring ready for significant movement.

During these calm phases, the market accumulates energy that is eventually released once a clear direction is established, often leading to dramatic rallies or sharp price declines. Both XRP and bitcoin surged in November-December following an extended range-bound period that left their bandwidth at levels comparable to those observed today.

That said, tighter bands do not always indicate a bullish volatility explosion; they can also foreshadow a sell-off. For example, the bands tightened in October 2022, signaling a significant move ahead, which materialized on the downside after FTX went bust.

It remains to be seen whether this latest spring compression will trigger bullish volatility or lead both tokens into a tailspin. The recent hawkish comments from Federal Reserve’s Chairman Jerome Powell and selling by some whales favor the latter.

Stay alert!

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The Best Trend Continuation Chart Patterns https://earlybirdsinvest.com/the-best-trend-continuation-chart-patterns/ https://earlybirdsinvest.com/the-best-trend-continuation-chart-patterns/#respond Thu, 06 Feb 2025 18:58:10 +0000 https://earlybirdsinvest.com/the-best-trend-continuation-chart-patterns/

Trading successfully depends on recognizing market structures and patterns that indicate whether an existing trend will continue. Trend continuation patterns are important for traders looking to capitalize on ongoing market momentum. This guide will cover the most effective trend continuation patterns, shedding light on how traders can use them to identify lucrative trading opportunities.

 

2. What Are Trend Continuation Patterns?

Trend continuation patterns are chart formations that signal a temporary pause in a prevailing trend, suggesting that the trend will likely resume after the pattern completes. These patterns matter because they help traders spot opportunities to join a trend after a brief consolidation phase, improving entry timing and minimizing the risk of buying or selling at the wrong time.

In the following we are going to cover the most important and most popular continuation patterns. The key for finding the best continuation pattern is the overall trend context in which the patterns occur. When you spot an ascending triangle, for example, you want it to form after a previous bullish trending phase. Most traders forget this important aspect and then run into problems with their pattern trading because they trade patterns in the wrong context. Thus, making sure you analyze the overall trend context during which patterns form is the most important aspect of finding the best continuation patterns.

 

3. Top Trend Continuation Patterns Explained

 

a. Flags and Pennants

Description: Flags and pennants are short-term continuation patterns that form after a sharp price movement, known as the flagpole. Flags are marked by parallel support and resistance trend lines, while pennants feature converging trendlines, resembling a small symmetrical triangle.

Visual Characteristics:

Flag

 

  • Pennants: A smaller, converging shape resembling a wedge, or a symmetrical triangle.

Pennant

 

Entry and Exit Points:

  • Entry: Traders typically enter a trade when the price breaks out of the flag or pennant in the direction of the prior trend.

  • Exit: A common strategy is to set the profit target equal to the length of the flagpole.

 

b. Ascending and Descending Triangles

Explanation: Ascending triangles form during uptrends and are characterized by a horizontal resistance line and an upward-sloping support line. Descending triangles appear in downtrends with a horizontal support line and a downward-sloping resistance line.

Breakout Confirmation:

Triangle

 

c. Cup and Handle Pattern

Formation: The cup and handle pattern is a bullish continuation setup where the price forms a “U”-shaped cup followed by a small downward handle. This pattern signals that the market has consolidated and is ready to resume its upward movement.

The handle part of the pattern is the most important signal because it shows that the pressure it building underneath the resistance when the price does not pull back lower. Therefore, the low of the handle should be much higher then the low of the cup.

Cup Handle

Duration:

 

Entry Strategy:

  • Entry: Place a buy order above the handle’s resistance.

  • Stop-Loss: Positioned below the handle’s low to minimize risk.

  • Take-Profit: Often set at a level equal to the cup’s depth.

 

d. Rectangles (Consolidation Patterns)

Overview: Rectangles are formed when the price consolidates sideways between parallel support and resistance levels, signifying a pause in the trend.

Rectangle

 

Trade Triggers:

Entry is confirmed when the price breaks above or below the rectangle pattern in the direction of the trend.

 

Risk Management Tips:

Always wait for confirmation before entering a trade. False breakouts are common in rectangle patterns, so use volume as an additional confirmation tool.

 

e. Inverted Head and Shoulders

Description: This pattern, usually associated with reversals, can sometimes indicate a continuation during an uptrend. It forms when the price makes three swing lows, with the middle one being the lowest (the head) and the other two (the shoulders) being higher but nearly equal.

Head and Shoulders

 

Continuation Context:

In an uptrend, the inverted head and shoulders pattern can act as a consolidation before the trend resumes.

 

Pattern Formation:

The neckline, formed by connecting the peaks of the two shoulders, serves as the breakout level. A successful breakout above this line signals the continuation.

 

Entry Strategy:

  • Enter when the price breaks above the neckline, confirming the pattern.

  • Stop-Loss: Place a stop-loss just below the right shoulder for protection.

 

f. Inside Day:

Formation: When, during an uptrend, a small inside daily candle forms, a potential next-day-breakout, can be a strong continuation signal. The pattern of momentum-inside-momentum candlestick can often be observed during a trending market.

Inside Day

 

Candle size:

The closer the price closes to the high of the previous momentum candle, the better the overall signal. If the price is able to push against the previous momentum candle in a strong way, it signals too much trend opposition.

 

Entry Strategy:

After the daily inside candle has fully closed, traders go to a lower timeframe to look for short-term entry patterns. Trader can choose any of the previously discussed continuation patterns and wait for them to show up on the lower timeframe after the inside candle has closed.

 

4. How to Identify a Valid Continuation Pattern

Support and resistance levels are essential for defining the pattern’s structure because they typically form the boundaries of trend continuation patterns.

Identifying trendlines also helps confirm the pattern’s boundaries and potential breakout points when dealing with patterns that do not follow horizontal boundaries.

In an uptrend, observing higher lows approaching a resistance level can indicate that pressure is building. This observation is crucial for patterns like triangles and cup and handles.

 

5. Trading Strategies Using Trend Continuation Patterns

 

Time Frames:

Patterns like flags and triangles can be observed in various time frames, from 1-hour to daily charts.

Use a higher time frame (HTF) to establish trend direction and a lower time frame (LTF) to find entry opportunities using continuation patterns.

 

Entry and Exit Strategies:

  • Typically, traders wait for a complete candle close above the pattern boundary before executing a trade. Pending order trading strategies are more prone to false signals but some traders may choose to place entry orders slightly above breakout levels.

  • Set stop-loss orders below recent swing lows (in uptrends) or highs (in downtrends) for effective risk management. The close the stop loss to the breakout level, the more vulnerable the stop loss to short-term volatility.

  • Define profit targets based on the measured move principle, such as the height of the pattern. Alternatively, using a fixed reward:risk ratio based on the stop loss distance is another great approach to work out targets.

 

6. Conclusion

Trend continuation patterns are invaluable tools for traders aiming to ride existing trends with more confidence and precision. Patterns like flags, pennants, triangles, cups and handles, and rectangles offer clear signals when correctly identified and traded in the correct higher timeframe context.

The huge benefit of pattern trading lies in their high level of objectivity. Patterns should be obvious when they form on your charts, removing a lot of uncertainty and subjectivity that other trading approaches bring.

Incorporating these patterns into your trading strategy and practicing them in a demo environment or by backtesting historical data can improve your technical analysis skills. Take time to observe, practice, and journal your findings for consistent growth in your trading journey.

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