Traders know not to ‘go long’ when this classic trading pattern shows up

Buying an asset in a downtrend can be a risky maneuver because most investors struggle to spot reversals and as the trend deepens traders take on deep losses. In instances like these, being able to spot descending channel patterns can help traders avoid buying in a bearish trend.

A “descending channel,” also known as a “bearish price channel” is formed by drawing two downward trendlines, parallel to each other, which confine the price action of the asset.

Descending channel pattern. Source: TradingView
THETA/USDT daily chart. Source: TradingView
XMR/USDT daily chart. Source: TradingView
LUNA/USDT daily chart. Source: TradingView
daily chart. Source: TradingView