Technical Pattern

Definition ∞ A Technical Pattern is a recognizable formation on a price chart that analysts use to forecast future price movements of an asset. These patterns are derived from historical price action and trading volume, reflecting the collective psychology of market participants. Examples include head and shoulders, triangles, and flags, each suggesting potential continuations or reversals of current trends. Such patterns are fundamental tools in technical analysis.
Context ∞ Technical Patterns are a staple in cryptocurrency market analysis, with news articles frequently referencing them to explain price predictions or market sentiment. Debates often arise regarding the reliability and predictive power of specific patterns across different market conditions. While some consider them self-fulfilling prophecies, others view them as valuable indicators for short-term and medium-term trading strategies.