Ascending Triangle Pattern: Analysing Price Trends for Traders

• Ascending triangle patterns are a popular chart indicator used by market analysts to anticipate future trends.
• The pattern typically appears during persistent uptrends or downtrends and is seen as a “continuation pattern.”
• An ascending triangle on a chart forms when the price consolidates between a rising trendline support and a horizontal trendline resistance.

Ascending triangle patterns are one of the most popular chart indicators that traders use to anticipate future trends. Market analysts rely on many technical indicators to make predictions, and this pattern is a highly sought-after one. An ascending triangle on a chart forms when the price consolidates between a rising trendline support and a horizontal trendline resistance. The pattern typically appears during persistent uptrends or downtrends and is seen as a “continuation pattern,” meaning the general market trend is likely to resume.

For example, the Bitcoin price chart above shows the BTC/USD trading pair forming an ascending triangle pattern between April 2020 and July 2020. The BTC price broke out of the triangle range in late July to the upside. It returned to retest the pattern’s resistance trendline as support in September for further bullish confirmation, resuming its uptrend.

The ascending triangle is not always a bellwether for bullish continuation, particularly in bear markets. For instance, its occurrence during the 2018 bear market preceded more downside, as shown in the Ether price chart below. This is why it is important to monitor the trendlines and see if they are broken. If they are broken, it could signal a potential reversal.

Traders also need to pay attention to volume. If the volume is decreasing as the triangle forms, it could signal a lack of conviction in the trend and a potential breakout. If the volume is increasing, it could signal that the trend is likely to continue.

In conclusion, ascending triangle patterns are a popular chart indicator used by traders and market analysts to anticipate future market trends. It is important to monitor the trendlines and volume, as they could signal a potential reversal or continuation of the trend.