Triangle Pattern on the 1 hour BTC Chart

On the 1 hour chart you can see an upward sloping triangle formed by bitcoin price action since the 27% sell off this morning. The lower upward sloping trendline of the triangle has been broken and as I write the BTC price remains below it. The typical resolution of this triangle pattern is a continuation of the prior trend i.e. more downside to follow. The downtrend in RSI which is now below 50 supports that view.


There are many technical analysis patterns and some have greater predictive power than others. All patterns fall into two categories - continuations & reversals. A continuation pattern is usually formed as part of price consolidation after a large move. After the consolidation is complete, the trend resumes with the same vigour as before. A reversal pattern is what you typically see when a trend is ending. When the reversal pattern is complete, a new trend begins in the opposite direction.

However, note the proximity of the 2 support and resistance lines that were important recently and the mid point (piercing line) the recent dominant dark candle created at 06:00 am today. None of these important resistances have been broken to the upside yet. A break of the upper line at 1155 would indicate the triangle pattern has failed and a period of rising prices is likely.

BTC: Triangle Continuation Pattern

One way to trade this pattern is to place a short trade with a limit at slightly lower prices. This is to increase the likelihood of you selling in a downtrend and to place a buy order at a limit (price level) above 1155. However, how far above or below the current price should such orders be placed? Perhaps 1 x ATR is sufficient.

You can also link these two orders by using an OCO (order cancel other) type order: when one order is triggered (either the buy or the sell) the other order is cancelled. However, this type of order is not available on the Plus500 platform so its rather academic.