What Are Crypto Chart Patterns?
Chart patterns are visual formations on price charts that traders use to predict future price movements. These patterns emerge from the collective psychology of market participants and have proven reliable across all markets, including cryptocurrency.
Trend continues (Flags, Pennants)
Trend changes (H&S, Double Top)
Can break either way (Triangles)
Bull Flag Pattern
Bullish ContinuationThe bull flag is one of the most reliable continuation patterns. It forms after a strong upward move (the flagpole) followed by a brief consolidation (the flag) that slopes slightly downward.
📋 How to Identify
- Strong upward price move (flagpole)
- Brief consolidation with slight downward slope
- Volume decreases during consolidation
- Breakout above flag resistance
🎯 How to Trade
- Entry: On breakout above flag
- Stop Loss: Below flag low
- Target: Flagpole height added to breakout
- Success Rate: ~67%
Head and Shoulders
Bearish ReversalThe head and shoulders pattern is a classic reversal formation signaling the end of an uptrend. It consists of three peaks: a higher middle peak (head) flanked by two lower peaks (shoulders).
📋 How to Identify
- Left shoulder: First peak and pullback
- Head: Higher peak, pullback to neckline
- Right shoulder: Lower peak than head
- Neckline: Connects the two pullback lows
🎯 How to Trade
- Entry: On break below neckline
- Stop Loss: Above right shoulder
- Target: Head-to-neckline distance below
- Success Rate: ~83%
Triangle Patterns
BilateralTriangle patterns form when price creates converging trendlines with higher lows and lower highs (symmetrical), higher lows with horizontal resistance (ascending), or lower highs with horizontal support (descending).
📐 Ascending Triangle
Horizontal resistance + rising support. Usually bullish breakout (~75% up).
📐 Descending Triangle
Horizontal support + falling resistance. Usually bearish breakout (~75% down).
📐 Symmetrical Triangle
Converging lines, can break either way. Trade in direction of prior trend.
Double Top & Double Bottom
Reversal PatternsDouble top (M-shape) and double bottom (W-shape) are reversal patterns that form when price tests a level twice but fails to break through, indicating a potential trend reversal.
📉 Double Top (Bearish)
- Price reaches high, pulls back
- Returns to same high, fails again
- Confirmation: Break below pullback low
- Target: Height of pattern below neckline
📈 Double Bottom (Bullish)
- Price reaches low, bounces
- Returns to same low, bounces again
- Confirmation: Break above bounce high
- Target: Height of pattern above neckline
📊 Chart Patterns Cheat Sheet
| Pattern | Type | Direction | Success Rate | Key Signal |
|---|---|---|---|---|
| Bull Flag | Continuation | 📈 Bullish | 67% | Volume breakout above flag |
| Bear Flag | Continuation | 📉 Bearish | 67% | Volume breakdown below flag |
| Head & Shoulders | Reversal | 📉 Bearish | 83% | Neckline break |
| Inv. Head & Shoulders | Reversal | 📈 Bullish | 83% | Neckline break |
| Ascending Triangle | Continuation | 📈 Bullish | 75% | Break above horizontal resistance |
| Descending Triangle | Continuation | 📉 Bearish | 75% | Break below horizontal support |
| Double Top | Reversal | 📉 Bearish | 72% | Break below neckline |
| Double Bottom | Reversal | 📈 Bullish | 72% | Break above neckline |
| Rising Wedge | Reversal | 📉 Bearish | 68% | Break below lower trendline |
| Falling Wedge | Reversal | 📈 Bullish | 68% | Break above upper trendline |
Scan for Patterns Automatically
Stop drawing patterns manually. Our AI scanner detects chart patterns across 2500+ coins in real-time.
Frequently Asked Questions
What is the most reliable chart pattern?
Head and Shoulders patterns have the highest success rate at approximately 83%, followed by Triangle patterns at 75% and Flag patterns at 67%. However, reliability depends heavily on confirmation with volume and the overall market trend.
How do I trade a bull flag pattern?
Enter on a breakout above the flag resistance with increased volume. Place stop loss below the flag low. Target is the flagpole height added to the breakout point. Bull flags work best in strong uptrends and have about a 67% success rate.
Do chart patterns work in crypto?
Yes, chart patterns work in crypto because they reflect crowd psychology, which is universal across markets. Crypto patterns may be slightly less reliable than stock patterns due to higher volatility, but they remain a core tool for crypto traders.
How long does it take to learn chart patterns?
You can learn the basic patterns (flags, triangles, H&S) in 2-3 weeks. Becoming consistently good at spotting them in real-time takes 3-6 months of practice. Use a pattern scanner tool to help train your eye while you learn.
Practice Chart Pattern Trading
Mock Trade Challenge
Identify the pattern and trade the breakout.
Price formed three peaks (middle highest) and recently broke below a key support level on heavy volume. It has now bounced back up to retest that broken support — which often acts as resistance. Volume is low on the bounce.
What would you do here?
Test Your Knowledge
Answer these questions to earn XP and unlock achievements.
A head and shoulders pattern signals what?