Lesson 7: Crypto Chart Patterns

🪙 Reading Crypto Charts in 5 Minutes · Lesson 7 of 10

In Lesson 6 you learned that volume confirms a move and that thin volume breeds fakeouts. Now we use trend, levels, and volume together to read the shapes price draws: chart patterns.

People assume crypto needs its own special patterns. It doesn't. A chart pattern is just a picture of buyers and sellers fighting, and that fight looks the same whether the ticker is AAPL or ETH. The classic patterns work fine on Bitcoin. You just give them more room.

The flag

A flag is the cleanest one to start with. Price makes a sharp move, pauses in a tight little drift, then continues in the same direction. The sharp move is the pole, the pause is the flag. After a coin rips 30% in two days and then chops sideways in a narrow band on fading volume, that band is a bull flag, and the usual read is a continuation higher when it breaks.

The tell is the same one from Lesson 6. Volume should dry up during the flag and spike on the breakout. No volume on the break and you're probably looking at a trap.

Ranges and breakouts

A range is price bouncing between a floor and a ceiling, the support and resistance you marked in Lesson 4. Crypto sits in ranges for weeks, especially when Bitcoin is undecided. The pattern you wait for is the breakout: price finally closes outside the box on heavy volume, and the side it breaks usually becomes the new direction.

Double tops and double bottoms

A double top is price hitting roughly the same high twice and failing both times. It looks like an M. Two rejections at the same level say buyers can't push through, and a drop below the dip between the peaks confirms the reversal down.

A double bottom is the mirror, a W. Price tests the same low twice, holds, and breaks above the middle peak to confirm a move up. Crypto prints these constantly because so many traders watch the same round numbers, like BTC stalling twice at 70k.

Volatility means wider targets

Here's the one real adjustment for crypto. The patterns are identical, but the moves are bigger, so your numbers have to stretch. A flag on a blue-chip stock might target a 4% move. The same flag on a mid-cap altcoin can target 30% or more.

Two things follow from that. Your stop has to sit far enough from entry that normal crypto noise won't tag it, which means a smaller position so the wider stop still costs you the same dollars. And your target should reflect crypto's range, the measured move off a flag pole is often a lot taller than a stock trader would expect.

Want the full library? Our bull flag pattern guide breaks down entries, stops, and targets in detail, and the chart patterns cheat sheet gives you a one-page reference for every shape worth knowing.

Next up

You can now read the patterns. Lesson 8 zooms out to the relationship that drives all of crypto: Bitcoin and the altcoins. We'll cover BTC dominance, why alts amplify Bitcoin's moves, and how to use BTC's chart as the lens for everything else.