Crypto Chart Pattern Compendium

All technical analysis (TA) uses the left side of the chart to attempt to predict the right side of the chart with a reasonable degree of certainty. With chart patterns, the business of TA can become more of an art than a science. People, or robots and algorithms written by people, have traded markets for decades, but the same chart patterns appear again and again on any tradable product.

TA and chart patterns work well with cryptocurrency because it is often difficult or impossible to properly evaluate fundamentals beyond basic network use and activity. Crypto is also 24/7 market with no interruptions or after market hours, which can make the chart patterns more obvious because there is zero downtime while the pattern forms.

Each chart pattern generally has a known completion percentage and outcome. The king of chart patterns is Thomas Bulkowski who chronicled almost 14,000 chart patterns on stocks from 1991 to 2008. The patterns are also closely aligned with Wyckoff market cycles. The markup or markdown phases often include continuation patterns whereas the accumulation and distribution phases often form reversal patterns.

Recognizing Chart Patterns

A chart pattern can be defined as a recognizable formation or fractal that gives a bias towards future price movements. All chart patterns have a stereotypical fractal structure which are generally easy to identify. A poorly defined pattern should not be discounted entirely, but thought of as having a reduced chance of having the…