Trapezoid Pattern Analysis｜Master the Trading Secrets of Expansion Patterns and Capture Market Reversals

In the volatility of the cryptocurrency market, there is a pattern of great reference value: the trapezoid pattern, also known as the expansion pattern. Once this pattern appears, it often indicates that the market is about to face a significant change, making it a crucial signal in technical analysis that should not be overlooked.

What Is the Essence of the Trapezoid Pattern

The trapezoid pattern is a typical reversal pattern, usually appearing during periods of highly active market sentiment or extreme pessimism, with price fluctuations being extremely intense. Its formation principle is not complicated—when the price range continues to expand upward and downward, the chart will show a visual effect of the upper and lower boundaries gradually opening, resembling a trumpet opening wider, hence the name.

What Are the Core Features of the Pattern

**Widening Price Fluctuation Trend**
The most obvious feature of the trapezoid pattern is that higher highs are continuously broken, and lower lows are constantly pushed down. This indicates that the divergence between bulls and bears is increasing, and market participants' emotions are becoming more volatile. A complete trapezoid pattern requires at least two higher peaks and two lower troughs to form.

**Volume Change Signals**
As price fluctuations become more intense, trading volume also enlarges accordingly. Especially when the price approaches key support or resistance levels, volume fluctuations are often quite noticeable, reflecting the fierce battle among market participants. The appearance of large trading volume often signifies that a new trend is about to be established.

The Three Major Types of Trapezoid Patterns

**Ascending Trapezoid (Bearish Signal)**
When this pattern appears in the later stage of an uptrend, it serves as a warning signal for the market. It indicates that the upward trend is weakening, and a reversal to the downside is likely to follow. Traders should be alert and implement risk management measures at this point.

**Descending Trapezoid (Bullish Signal)**
If this pattern is captured at the end of a downtrend, it suggests that the downward momentum is nearly exhausted, and the market may be brewing a rebound opportunity. This is often regarded as an important reference for the bottom area, implying that an upward trend may soon start.

**Symmetrical Trapezoid (Uncertain Direction)**
The direction of this pattern is not clear; both upward and downward breakouts are possible. In such cases, traders need to use other technical indicators for comprehensive judgment or wait for more explicit breakout signals to more accurately predict the subsequent trend.

Key Practical Tips

The value of the trapezoid pattern lies in its ability to help traders identify key turning points in the market. When the pattern completes and a clear breakout occurs, often accompanied by volume confirmation, it becomes an important moment to look for trading opportunities. Whether it’s BTC or ETH, this pattern exhibits similar behavior across various crypto assets.