Descending Triangle

A descending triangle is a chart pattern commonly used in technical analysis, characterized by a series of lower highs and a consistent horizontal support line. This pattern typically suggests a bearish trend, indicating that sellers are increasingly dominating the market, pushing the price down.

How It Forms

The pattern forms when the price creates lower highs but finds support at a specific level. As the pattern progresses, the price moves closer to the support line, often leading to a breakout when the support is breached.

Significance in Trading

Traders use the descending triangle to predict potential price breakdowns, with the expectation that the price will fall further once the support level is broken. It is important to note that while the pattern often signals bearishness, price action can vary.