After all, that's what the Federal Reserve wants and needs,' ING analysts wrote in a blog post published Monday. 'Expect financial conditions to re-tighten in the weeks and months ahead. A rising dollar and bond yields mean financial conditions are tightening, a bearish development for liquidity-addicted risk assets like stocks and cryptocurrencies. A rising wedge breakdown would target a $21,500 area.'įinancial conditions are determined by the U.S. The pseudonymous analyst Nebraskagooner tweeted, 'Really not looking hot here after multiple rejections. Chart-based traders typically take short positions – bets on declines – when prices dive out of the rising wedge, confirming a breakdown. So an occurrence of a rising wedge often has traders preparing for a fresh price drop. The converging nature of trendlines indicates volatility is contracting as prices rise, a sign of recovery losing steam – and that tension is building, with sellers contesting the move higher. 'BTC is consolidating within a rising wedge, which is a bearish pattern,' Milan Vojtek, a technical analysis enthusiast, tweeted early Tuesday, echoing the views of his Twitter compatriots.Ī rising wedge represents a bounce contained between two converging trendlines connecting higher lows and higher highs.

However, according to Crypto Twitter, the recovery has suddenly drawn the shape of a bearish pattern on price charts and could be short-lived. Learn more about wedge patterns like the falling wedge pattern.Bitcoin (BTC) has gained 36% in two months, offering relief to the battered bulls. Rising wedge patterns offer reliable signals for short selling, so we highlight them within downtrends for members of our stock pick service. Each rising wedge led to further downside, with the sell signal or the short sell signal being the downside break of the lower rising trend line. This stock formed a pair of rising wedge patterns during its downtrend. Stronger volume and a higher intensity that accompanies the selling makes this pattern more reliable. Volume expansion which accompanies a breakdown from a rising wedge pattern adds reliability when trading this pattern.īreakout Expectation: A breakdown from a rising wedge pattern should be accompanied by volume expansion as rising support is broken and selling accelerates.

The early portion of the wedge has a wider price range, while the latter stages of a rising wedge are characterized by tighter price action. This may be seen by drawing two rising trend lines, one steeper trend line connecting minor lows, and a shallower trend line connecting minor highs. When found within the context of an uptrend, the rising wedge is an indication that an uptrend may soon reverse course with downside price action to follow.Īppearance: The rising wedge pattern is a contracting trading range with an upward tilt. The rising wedge pattern is a reliable short sell indication.Ĭontext: When found within a downtrend, the rising wedge is a continuation pattern with similar characteristics of a bear flag pattern. In either case, a downside break from a rising wedge pattern is a technical sell signal or short sell signal. Rising wedge patterns are bearish and are found at the ends of uptrends as well as during downtrends.