Bitcoin: Fibonacci Triangle Pattern

14 de fev.

Seeing diamond pattern on tops gives us general clue that market is about to fall. After all, this is what it draws (what masses go through) as it loses momentum and eventually goes for a correction.

However, even if we're very sure, rushing to trade based on systematic patterns does not actually guarantee the desired outcome. For instance, the bullrun which started in 2016 lasted relatively longer and each top of smaller composite cycles might also have drawn similar patterns that one might identify as bearish reveals, but it kept going up. The concept of order in chaos is not absolute, so it's best not to rely on only one interpretation, especially when we're dealing with collective human consciousness where uncertainty and duality makes it one of the most trickiest systems. Therefore, seeking for an additional layer of confirmation is a preferred discipline, before considering fractals.

Triangle Pattern - General Theory
Historic swings are obviously crucial, however focusing on the recent price activity deserves a higher priority. If we observe the pattern closely, we can establish that there were rejections from top as well as bottom. In this triangular formation, a falling ATR reflects the indecisiveness of market participants.


I've learnt from CMT that triangle pattern is also referred to as a “coil” because of the way price action behaves within the pattern — similar to a compressed spring or coil that is winding tighter before a strong breakout (energy release).

You must know that they come in three primary types, each with distinct price movement implications. The symmetrical triangle is a neutral pattern where price forms lower highs and higher lows, signaling indecision and a breakout in either direction. The ascending triangle is bullish, featuring higher lows and a flat resistance level, indicating strong buying pressure and a likely upward breakout. In our case, we're dealing with the descending triangle which is interpreted as bearish, because of lower highs and a flat support line, suggesting increasing selling pressure and a higher probability of a downside breakout. (We still need to wait for breakout to occur!)

Trading a coil triangle pattern effectively involves a systematic approach to confirm breakouts and manage risk. First, traders should wait for a breakout beyond either the resistance or support level, ensuring the move is decisive. A key confirmation factor is trading volume—a breakout accompanied by high volume is generally more reliable, reducing the likelihood of false moves. Once a breakout occurs, traders can set price targets by measuring the height of the triangle at its widest point and projecting that distance from the breakout level. To mitigate risk, it is essential to place a stop-loss just inside the triangle’s boundaries, ensuring that any unexpected reversals do not lead to significant losses.

Fibonacci Triangle Visualization
Since I love to experiment, I couldn't resist from capturing the pattern using Fibonacci Channels to help you visualize the high passions and tensions during the battle between bulls and bears for the direction of trend. It provides a data-driven structured way to project breakout targets with precision.

This approach is a part of my research aimed at studying and understanding the actual market behavior, particularly market noises that lead to false signals.

19 de fev.

Trade ativo

A move to bottom following by pullback - confirms we're in triangle.
The longer price consolidates within a triangle pattern, the more significant the breakout tends to be. This is because of the buildup of trapped liquidity and compression of volatility, leading to an explosive move once a breakout occurs.

há 6 dias

Trade fechado: objetivo atingido

Price has broken below the Triangle Pattern. Now finding local support at structure-based Fib levels.