Definition of the Rectangle Pattern
The rectangle is a price pattern that appears when the price moves within a defined range between support and resistance for a certain period of time. In other words, the price is "between a higher horizontal line (resistance) and a lower horizontal line (support), forming a rectangular shape on the chart.
Support represents the lowest price where buyers show interest.
Resistance represents the highest price where sellers show a desire to sell.
Positive Rectangle Pattern (Bullish Rectangle)
Situation: Appears after an upward trend.
Characteristics:
The price moves sideways after a strong upward wave.
Indicates accumulation by buyers before the upward trend continues.
When the price breaks the upper resistance of the rectangle, it often continues to rise with the same strength as the previous movement.
Negative Rectangle Pattern (Bearish Rectangle)
Situation: Appears after a downward trend.
Characteristics:
The price moves sideways after a downward wave.
Indicates accumulation by sellers before the downward trend continues.
When the price breaks the lower support of the rectangle, it often continues to fall with the same strength as the previous movement.
Practical Tips
Always ensure trading volume: Increasing volume at the breakout enhances the reliability of the movement. Pay attention to long congestion periods within the rectangle; sometimes they turn into random fluctuation areas before a big movement. Combining with other indicators like RSI or MACD enhances the chances of trade success. #BTCRebound90kNext? #USJobsData
