I noticed an interesting pattern on the BTC chart that deserves a closer look. It's an expanding wedge in a downtrend — one of those patterns that traders often overlook, but it can provide a good entry signal.

The essence of the pattern is that the price forms a series of increasingly lower highs from above, while a widening lower line appears below with the distance between the lows growing. It sounds complicated, but in reality, it simply means that the downward momentum is gradually losing strength. Volatility increases, but the direction is weakening.

Why is the expanding wedge so important? Because it often precedes a reversal. When you see such a structure, you should prepare for a potential breakout above the upper line. It’s not a guarantee, but a fairly reliable signal if you wait for confirmation.

How I trade this pattern. The first rule — don’t rush. I wait for a clear breakout above the upper boundary of the expanding wedge, rather than entering on any bounce. The second — I look at the volume. If the breakout is accompanied by a sharp increase in volume, it’s a much more convincing signal than a weak breakout. This indicates that there’s real interest behind the move, not just a technical correction.

As for profit targets, they can be estimated by the height of the widest part of the expanding wedge — I measure the distance between the upper and lower lines at the widest point and project it upward from the breakout point. This gives an approximate level that the price could reach.

The pattern shows that after a period of downward pressure, a rally may begin. This doesn’t mean it will go up immediately, but the probability of a reversal increases. If you see such a structure on the BTC chart or other assets, it’s worth adding to your watchlist and waiting for a breakout confirmation.