Lumia (LUMIA) revolutionizes RWA tokenization with DeFi liquidity, MEV protection, and zk-rollup technology.

Real-world assets (RWAs) are quickly becoming a leading topic within the blockchain ecosystem, with many protocols and chains starting to offer asset tokenization services. However, many of these solutions are based on simply moving a variety of physical and digital assets to a 

 environment without regard for how these tokenized on-chain products will be further utilized. As a result, after companies tokenize their assets on-chain, they realize that the lack of liquidity is hampering the assets' further circulation and adoption.

 project that has taken a much more comprehensive approach to asset tokenization. The platform allows businesses to tokenize various RWAs, including a diverse range of commodities, and provides ways to boost their liquidity and applications within the 

 (DeFi) realm. Based on Polygon's modular 

 (Polygon CDK), Lumia provides a robust, secure, compliant, cost-effective and scalable infrastructure to put RWAs to active use within the world of web3.

Having started its operations under the name of 

 (ORN) as an Ethereum (ETH)-–based app that aggregated liquidity from various 

 (DEX) exchanges, the project rebranded to Lumia in 2023 and expanded its functionality to focus on the RWA niche. As of late 2024, Lumia remains one of the pioneers of liquidity-enhanced RWA use on blockchain.

 (LUMIA) is a Layer 2 blockchain designed for tokenization and use of RWAs in DeFi applications. 

The platform allows businesses to bring a variety of physical and digital assets 

, securely tokenize them and further use the assets for collateral provision, lending and other crypto finance use cases.

The Lumia platform's origins date back to 2020, when Orion Protocol (ORN) was launched on Ethereum. Co-founded by Alexey Koloskov and Kal Ali, Orion offered liquidity aggregation from multiple CEX and DEX platforms. In late 2023, Orion announced its rebranding to Lumia, focusing more specifically on RWAs and their active use through enhanced liquidity provision.

The project also transitioned from Ethereum to its own Layer 2 chain in October 2024, with ORN tokens to be migrated to the new platform's native token, LUMIA, at a 1:1 ratio. As of December 2024, the major crypto exchange platforms have migrated ORN to LUMIA or are in the process of migrating it.

 (ZKP)–based rollup network built using thePolygon CDK, a versatile, open-source blockchain development framework provided by the 

 project. The Lumia platform is highly modular, with different components used for its execution, data availability (DA) and settlement layers.

Chain Abstraction and Account Abstraction

 to offer chain abstraction (CA), and with thirdweb to offer account abstraction (AA) services. Lumia's CA service is designed to provide DeFi users with a single-chain experience by accessing liquidity and opportunities across multiple blockchain networks. Meanwhile, AA allows users to transact across multiple platforms on a single, user-friendly interface. By leveraging 

–based addresses instead of the standard externally-owned account (EOA) addresses, users can seamlessly transact across platforms using a single wallet tied to these smart contracts.

By providing a unified, user-friendly interface, Lumia's AA lets Web 2.0 users enter the world of web3-based DeFi with a minimal learning curve involved. AA’s additional benefits include enhanced security at the smart contract level and gasless, Lumia-sponsored transactions.

Lumia users can also take advantage of intent-based trading, meaning they specify their transaction intents, and orders only execute if a matching deal is found across the entire ecosystem accessible to Lumia. Special liquidity nodes process intent-based orders and offer the best rates they can source for the user’s intent. This helps ensure that Lumia users get the best possible deals.

This advanced trading mechanism is powered by 

, which introduces various unique advantages to enhance the user experience. For instance, it provides robust security against 

 (MEV) attacks, one of the most common exploits in the world of DeFi. It also optimizes price efficiency and minimizes the negative price impact of trades by leveraging its Resolvers to source liquidity across the entire DeFi market.

Built using the Polygon CDK, Lumia is a ZK–based rollup running on a 

 processing engine. Based on a highly modular design, the Polygon CDK allows rollups to easily incorporate different execution, DA and settlement layers and other associated technologies. Lumia, for instance, integrates various execution engines, such as the privacy-focused Privado ID and Miden. Privado ID allows Lumia to securely and privately identify users. Based on zk technology, Privado ID enables individuals and businesses to control their personal data by sharing only the required identity information to DApps without revealing any private or financially sensitive details.

In turn, Miden is also a ZK–based platform that offers private accounts and transaction execution. Operating as a rollup network, Miden is a highly scalable environment for DeFi operators and users who value data confidentiality, an essential consideration for any finance-focused platform.

 with other blockchain environments, achieved by leveraging two modular interoperability layers: AggLayer and Hyperlane.

AggLayer is Lumia's primary interoperability layer. Built into the Polygon CDK, AggLayer offers cross-chain transaction capacity across various Polygon-based Layer 2 rollup networks. It unifies liquidity across the entire ecosystem of AggLayer-connected chains, allowing Lumia to provide deep liquidity for tokenized assets.

Hyperlane, the other interoperability protocol used by Lumia, is a solution designed to help developers easily and efficiently send arbitrary data across chains. It expands Lumia's reach beyond Polygon's ecosystem. Theoretically, it may allow Lumia to access resources and liquidity across the entire ecosystem of chains that have adopted Hyperlane. As of late 2024, there are dozens of such Hyperlane-powered blockchains outside of the Polygon environment.

Lumia provides a streamlined process for RWA tokenization. As the first step, the asset owner needs to provide proof of ownership documentation and undergo any other required due diligence procedures. Following that, a Bailment Agreement is signed between the asset owner and the Lumia Foundation, the legal entity behind the project.

Within the contexts of blockchain technology and RWAs, Bailment Agreements are utilized to entrust physical assets to an authorized custodian, while the actual tokenized representations of these assets are held and used within the blockchain space.

After the parties sign a Bailment Agreement, the asset is appraised by third-party valuators and then tokenized on-chain. The tokenized version of the asset can now be used in DeFi applications accessible via Lumia for typical crypto finance operations, e.g., collateral provision, lending, borrowing, staking, yield management and more.

 protocol, sources liquidity from multiple exchange platforms. (This is the core service from which Lumia started its operations when it was known as Orion Protocol.) It accesses liquidity across the crypto market to provide Lumia-based RWAs with much more than tokenized on-chain representation. Besides access to liquidity, Lumia Stream features MEV protection for all trades conducted on the platform, and 

, which allow tokenized assets to be bridged across blockchain platforms.

Using Lumia Stream, developers can also implement virtual 

, which show optimal trading paths between multiple exchanges. These virtual order books can also transform pricing information from the structure used in 

 (AMM) pools to a format compatible with the standard order book model.

Lumia has several specialized node types, including DNLP (Delta Neutral Liquidity Provisioning) nodes and DAC (Data Availability Committee) nodes. The former are designed for decentralized liquidity provision on the network, while the latter play a key role in data validation.

There are also HyperNodes that can be used either to provide the licenses for the operation rights of virtual Lumia machines or supply the licenses used to delegate to DNLP and DAC node operators. HyperNodes can choose to run a DNLP or DAC node or delegate to these node types and earn ecosystem rewards. 

Lumia first made HyperNode licenses available for purchase in July 2024. The license releases and the associated rollout of HyperNodes will be gradual.

The platform uses a network of zkProvers that are responsible for the generation of validity proofs — cryptographic stamps that certify the validity of transaction blocks. Currently, Lumia utilizes the default zkProver infrastructure provided by the Polygon CDK. However, the project has plans to introduce a custom prover layer in partnership with 

, a provider of low-cost and highly scalable ZK validation services. Per the project's documentation, there will be further announcements on integrating a Gevolut-based zkProver system in Q1 2025.

Lumia's early 2025 plans also include creating a decentralized sequencer network (DCN). Sequencers are critical parts of any rollup system. These nodes organize transactions into blocks for further validation. A typical rollup network uses only one sequencer, an issue often cited as one of the key vulnerabilities of rollups.

Lumia aims to introduce a decentralized network of multiple sequencer nodes tailored to the Lumia platform to optimize its security and performance. The project plans to provide incentives in the form of LUMIA tokens to sequencer service providers in order to build its DCN.

We’ve already mentioned some of the specialized node types on Lumia — DNLP, DAC and HyperNodes. Another crucial node variety on the platform is DA (lightclient) nodes. They play a pivotal role in decentralized data availability by ensuring transaction data is securely stored and easily accessible across the Lumia network. Transaction data on Lumia is distributed and stored across the network of DA nodes to provide validators with easy retrieval when data is required.

Data on the DA node network is stored in a secure, cryptographically protected format. Both the encryption and the distributed storage mode ensure confidentiality and high security for Lumia's transaction data.

DA nodes are incentivized with LUMIA tokens, based on their contributions to the network. Node operators are encouraged to actively participate, as the rewards are determined by both the amount of data processing they handle and their network uptime.

The platform's native cryptocurrency, LUMIA, is used for a wide variety of functions:

The LUMIA token was launched in mid-October 2024, replacing the earlier ORN token, the platform's native crypto. ORN was introduced in July 2020, along with the launch of Orion Protocol. As mentioned above, the platform has announced the migration of ORN to LUMIA at a rate of 1:1. As of December 2024, ORN tokens are still in circulation, but are expected to eventually be migrated to LUMIA completely.

LUMIA is a supply-capped token, with a total and maximum supply of 238,888,888.

 as a Perpetual contract based on USDT. Under the terms of the contract, you can trade LUMIA with up to 12.5x leverage.

Bybit's Innovation Zone offers perpetual trading users access to promising new higher-risk/higher-potential cryptocurrencies selected by the platform's professional team.

As of Dec 19, 2024, the LUMIA token is trading at $1.61, or 36.2% lower than its ATH of $2.49 on Dec 4, 2024, and 72.8% higher than its ATL of $0.9205 on Nov 4, 2024.

Long-term price forecasts for LUMIA are bullish. DigitalCoinPrice 

 at $4.19 in 2025 and $12.06 in 2030, while CoinCodex 

 that the token will trade at $7.50 in 2025 and fall slightly to $6.53 in 2030.

Lumia isn't your ordinary RWA-based blockchain project. While countless new platforms help users tokenize physical world assets, very few offer viable ways of further using the tokenized crypto assets within the DeFi ecosystem. Recognizing the gap, the Lumia project team has decisively taken on the task of making RWAs a highly liquid and actively used form of cryptocurrency.

The project also features a solid infrastructural backbone, supported by the Polygon CDK and its high architectural modularity. Using technologies like Miden, Privado ID, AggLayer and Hyperlane adds to the security and interoperability of the Lumia platform. At the same time, Lumia isn't done yet with sculpting its architecture into a piece of blockchain art — in 2025, the project plans to implement a decentralized sequencer network and partner with Gevolut to provide an efficient zkProver layer.

As Lumia builds up its architecture, tokenizing and 

 will undoubtedly become even more efficient, convenient and secure — and decisively more DeFi-esque.

Advanced

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Lumia (LUMIA): Bridging RWA & DeFi for a New Financial Era

SynFutures is a decentralized platform that lets users list on-chain perpetual futures for any crypto and trade them. Learn about SynFutures and how to trade F on Bybit.

SynFutures is a decentralized marketplace that lets users list on-chain perpetual futures for any cryptocurrency and trade them on the platform. In addition to the wide range of supported assets (such as 

, or RWAs, and NFTs), the project's Oyster 

 (AMM) solution enhances liquidity through the combination of an AMM model and an 

. Powered by the native F token, SynFutures is backed by prominent investors and features a cumulative trading volume of over $230 billion.

In this article, we’ll explore SynFutures, its key features and the mechanics behind the Oyster AMM, as well as the F token and its tokenomics.

 is a decentralized derivatives platform that enables users to trade on-chain 

. Powered by a single-token liquidity model, SynFutures allows free listing of any digital asset on its protocol without any 

 (DAO) proposals or centralized intervention. Doing so fosters on-chain trading of a diverse range of cryptocurrency perpetuals via the platform.

To maximize liquidity, SynFutures employs the Oyster automated market maker

 that provides a customizable set of tools, such as concentrated liquidity and 

. In addition to crypto, the project also enables users to trade perpetual contracts based on 

 platform. As the native coin of the SynFutures ecosystem, the F token is utilized primarily for community governance and 

 boosts, as well as for fee discounts and rewards.

At the time of this writing (Dec 19, 2024), SynFutures boasts a cumulative trading volume of

 and 308,900 total users, of which 22,410 were active within the past seven days. In addition to featuring a 

 (TVL) of over $50 million, the decentralized derivatives platform has processed 15.24 million transactions to date.

SynFutures was founded in 2020 by Rachel Lin and Matthew Liu.Before serving as the CEO and co-founder of the decentralized futures platform, Lin worked at Deutsche Bank, specializing in derivatives. She also co-founded Matrixport, one of Asia's largest digital asset neobanks.

Starting his career as a trader managing Deutsche Bank's Asia rates desk, Matthew Liu's MBA at Northwestern eventually led to him joining the blockchain space. While at Ant Group, he was instrumental in setting up the company's global treasury and later took charge of its financial blockchain business, with a focus on secondary market trading and credit tokenization.

To date, SynFutures has raised $37.4 million in funding from investors in one seed and two early-stage financing rounds. Some of the most notable contributors include Bybit, Pantera Capital, Polychain Capital, Dragonfly Capital, HashKey Capital and Standard Crypto, among others.

SynFutures' ecosystem consists of three flagship solutions:

SynFutures' Oyster AMM: How Does it Work?

One of the most unique components of SynFutures' ecosystem is the 

. It combines the functionality of order books and AMMs to offer users the following key features:

SynFutures' F token serves as the native coin within the project's ecosystem. The main utilities of the digital asset include the following:

F's max supply is capped at 10 billion tokens. Currently, 1.2 billion F are circulating in the market. As of Dec 16, 2024, the native coin 

 a nearly $86.5 million market cap, a fully diluted valuation (FDV) of $720 million and a trading volume of $28.52 million over the past 24 hours. F’s allocation is per the graphic below:

SynFutures’ decentralized derivatives platform enables users to list and trade any digital asset and combine it with other cryptocurrencies to create combinations of perpetual futures pairs. Powered by the F native token and the Oyster AMM, SynFutures fosters enhanced liquidity and user experience and a permissionless listing process for perpetuals.

's user-friendly and intuitive Spot trading platform. 

Intermediate

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SynFutures (F): Exploring the Decentralized Derivatives Platform

Learn about Hypurr Fun, a unique Telegram trading bot and launchpad for Hyperliquid, a high-performance decentralized trading platform and layer 1.

Hyperliquid is a high-performance decentralized trading blockchain that has recently gained a lot of attention. It offers a comprehensive suite of trading features, including perpetual contracts with leverage of up to 50x on major cryptocurrencies like BTC and ETH. Additionally, the upcoming 

 launch is set to further grow the Hyperliquid ecosystem, providing Ethereum-compatible smart contracts to developers.

 is a high-performance Layer 1 blockchain built specifically for decentralized derivatives trading. It combines the best features of 

 (DeFi) with centralized finance (CeFi) user experience. 

Unlike traditional decentralized rivals that often struggle with 

 issues, Hyperliquid delivers a fast, low-slippage trading environment designed to cater to both professional traders and crypto enthusiasts.

By leveraging the HyperBFT algorithm, Hyperliquid can process over 100,000 TPS with minimal latency. This ensures that trades are executed almost instantaneously, providing a seamless trading experience comparable to that of major centralized exchanges (CEXs).

 is the native token of the Hyperliquid blockchain. It powers the ecosystem and provides unique benefits to its holders. HYPE thus serves as the backbone of the platform, enabling trading fee discounts, staking opportunities and governance rights. The token also incorporates a 

 mechanism to maintain price stability, aligning the platform’s growth with token value appreciation.

On Nov 29, 2024, Hyperliquid conducted one of the largest and most generous airdrops in crypto history. The genesis airdrop distributed 31% of the total HYPE supply to over 90,000 early adopters and users of the platform. This airdrop not only rewarded loyal community members, but also set a new standard for fairness and inclusivity.

Token distribution of HYPE is as follows:

Hyperliquid uses an unique and competitive auction mechanism to set the price for newly listed tokens on spot exchanges. Auctions occur every 31 hours, starting at double the price of the last transaction.

The listing auction is a process designed to limit new token listings to just 282 per year. Each auction starts at a high price and decreases linearly until a buyer emerges. This scarcity-driven model has made Hyperliquid’s auctions highly coveted, with prices steadily climbing as teams rush to secure their spot.

Recent auctions highlight this trend: SOVRN paid $262,000 to secure a listing, while MON, rumored to be tied to the Pixelmon team, purchased theirs for nearly double at almost $488,000. Tomorrow’s auction for GOD is expected to start at roughly $1 million, showcasing the parabolic rise in listing costs.

The constantly increasing scarcity of listings underscores the value of securing exposure on Hyperliquid's high-performance trading platform.

 is a unique Telegram trading bot that makes launching and trading meme coins on Hyperliquid effortless. With just a few clicks, users can participate in token launches, track their performance and compete with other traders in exclusive 

 chats. It’s primarily designed for speed, simplicity and security. Hypurr Fun brings the full power of Hyperliquid’s meme coin ecosystem directly to your fingertips.

 offers all the tools a user needs to snipe new launches, manage portfolios and maximize efficiency. 

Users can configure slippage, entry sizes and exit percentages to tailor their trading experience. The bot is always on, ensuring you never miss an opportunity, while its responsive interface and robust security measures provide a seamless, safe experience.

Whether you’re a seasoned trader or new to the game, Hypurr Fun ensures you stay ahead in the competitive meme coin market.

Hypurr Fun has quickly become a launchpad for some of the most exciting projects in the Hyperliquid ecosystem. Among the top launches is HYENA, a fierce predator-themed token with a current market cap of $6.1M. HYENA has gained significant traction as a key player on Hyperliquid, boasting a strong trust factor and consistent progress toward full deployment.

Another standout is BEATS, an AI-driven music creation platform with a $1.52M market cap. BEATS leverages autonomous AI technology to revolutionize music production, showcasing the innovative potential of Hypurr Fun–launched tokens. Lastly, HYRO, the liquid hero, has made its mark with a $865.97K market cap, offering unique creative value to the ecosystem. These 

 the diversity and dynamism of Hypurr Fun’s capabilities and potential.

The HFUN token has emerged as a standout in the Hyperliquid ecosystem. At the time of this writing (Dec 18, 2024), it has a market cap of $230M and a fully diluted valuation of the same amount. HFUN demonstrates Hypurr Fun’s strength: the token has achieved a 285% price increase in the past seven days, far outpacing both the broader crypto market and similar Telegram bot-based projects.

A unique feature of HFUN is its fee-to-buyback mechanism, whereby 100% of fees from trades are used to purchase HFUN tokens, creating consistent upward price pressure. 

Despite its origins as a test for the Hypurr Fun Telegram bot, HFUN has captured the attention of traders, reaching an all-time high of $300.19 on Dec 17, 2024. This growth reflects both the community's enthusiasm for the token and its role in the thriving ecosystem of Hyperliquid.

The Hyperliquid ecosystem is on fire, with its innovative features and exclusive platforms such as Hypurr Fun driving unparalleled momentum. From top launches like HYENA and BEATS to the exceptional performance of HFUN, it’s clear that Hyperliquid is becoming the go-to destination for meme coin enthusiasts and serious traders alike. 

As listing auctions heat up and trading tools evolve, the opportunities within Hyperliquid are only set to grow.

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Hypurr Fun: Hyperliquid's Premier Launchpad and Trading Bot

Sonic Labs has launched its Sonic mainnet, an EVM-compatible Layer-1 blockchain evolved from Fantom, offering 10,000 TPS and sub-second finality.

The S&P 500 fell 2.95% after the Fed cut rates but reduced 2025 cut projections, raising inflation and growth forecasts, which drove up Treasury yields. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 2.71%, with Bitcoin and Ether dropping by 5.71% and 6.00%, respectively in the past 24 hours.

Today's top performer is USUAL, which surged 38.21% following the partnership announcement between Usual, Ethena, and BUIDL to enhance liquidity, yield, and composability in DeFi.

Usual (USUAL), launched in December 2024, is a multi-chain platform offering USD0, a decentralized stablecoin backed by real-world assets, redistributing financial power to the community. Usual, Ethena, and BUIDL (tokenized by Securitize) have 

 to enhance DeFi by integrating liquidity, yield, and composability. The collaboration allows USDtb and BUIDL as collateral for Usual’s USD0 stablecoin, offering maximized yields and seamless swaps between USD0, USDtb, and sUSDe. Ethena strengthens the initiative with delta-neutral strategies and treasury support, bridging TradFi and DeFi for improved liquidity and profitability.

Check Out the Latest Prices, Charts, and Data of 

, an EVM-compatible Layer-1 blockchain evolved from Fantom, offering 10,000 TPS and sub-second finality. The platform introduces a "Fee Monetization" model that shares up to 90% of network fees with developers. FTM token holders can upgrade to the new S token on a one-to-one basis through a dedicated portal, with free swaps available for the first 90 days. The platform features a decentralized Sonic Gateway for secure Ethereum bridging, with plans for multi-chain expansion. Sonic Labs is distributing 190.5 million S tokens through an airdrop program targeting both users and developers, aiming to drive adoption and innovation on the platform.

Yesterday, BTC Spot ETFs experienced total outflows of $84.3 million, including $35.9 million from GBTC and $48.4 million from non-GBTC funds.

Farm Frens and Everseed, developed by Amihan Entertainment, will 

 their token and airdrop on Ethereum layer-2 network Base in January 2025. Players of Farm Frens and Everseed NFT holders will qualify for the airdrop. The studio plans to unite the games further, blending crypto and AI to create next-gen interactive experiences.

Beginner

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Ethena Labs Forms Partnership with World Liberty Financial to Integrate sUSDe Token and Enhance Liquidity

Candlestick

Trading

Is the crypto sell off slowing down? Look out for bullish reversals by including falling wedge patterns in your trading arsenal.

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The falling wedge is a bullish price pattern that represents a story about the market in which bulls are preparing for another push. In cryptocurrency trading, buying an asset from a logical position is more likely to provide success than randomly buying an asset without applying 

. Therefore, keeping falling wedge patterns as a main pattern in your trading checklist is a great way to make money from the crypto market. This article explains the falling wedge pattern’s bullish indication in crypto charts, along with its use as both trend continuation and reversal pattern.

Is a Falling Wedge Pattern Bullish or Bearish?

A falling wedge pattern is bullish, although it appears after a bearish trend. It signifies that bulls have lost their momentum, and bears have temporarily taken control over the price. As a result, the price starts to make new lower lows, but at a corrective pace. 

Crypto prices rarely move in a straight line. Rather, like most assets they tend to zigzag, with swing lows and highs forming, even if the price remains within a trend. Therefore, investors often experience temporary bearish correction within bullish trends, giving rise to patterns like the wedge, triangle, flag or channel. 

These are signs that buying pressures are being reduced due to profit-taking. The uniqueness of the falling wedge pattern is that it can produce a higher accuracy of trade than a traditional descending channel.

Although both the descending channel and falling wedge are bullish reversal patterns, the falling wedge has better accuracy than the descending channel, whose price corrects lower by maintaining an equal distance between swing highs and lows. 

On the other hand, with the falling wedge, swing levels squeeze toward each other, which is a sign of a deeper correction. Before making a trading decision, investors should focus on where the major trend is heading and how volumes are performing.

Let’s look at the pros and cons of the falling wedge pattern:

A price pattern on a cryptocurrency chart isn’t randomly formed. Instead, it represents a story about buyers’ and sellers’ activity. Likewise, the falling wedge pattern, which occurs after a bearish trend, represents a narrative about what bulls and bears are doing — and what they might do next. 

A bullish trend forms after a significant event by encouraging buyers to long an asset with the hope of future price appreciation. However, it’s often difficult for investors to hold this position for a long time. They usually book a profit after getting some benefit, often adding more positions when the price is discounted. As a result, the bearish wedge pattern that we see after a bullish trend is partially the result of buyers’ profit-taking. Once the profit-taking is over and the price finds a dip, investors will begin to buy again. 

The trading approach with the falling wedge pattern is to find when the correction is over and the bullish trend is likely to resume. The global financial market is driven by institutional traders who need liquidity. There have to be enough buyers to sell and enough sellers to buy. Therefore, patterns like the falling wedge indicate that institutional traders who’ve created the bullish trend might open another buying position, resuming the trend after a discount.

The above image demonstrates a falling wedge pattern appearing after a bearish trend. Bitcoin’s price moves sharply lower from $64,000 to $30,000, but despite strong selling pressure, it doesn’t break below $30,000. As a result, the price remains corrective and forms a falling wedge. In this pattern, a new lower low and lower high are formed as the price remains within converging trend line support and resistance. 

Besides swing levels, investors should monitor how the volume is changing. As the price moves to a consolidation phase, the volume should reduce due to less trading activity. However, once the breakout happens, it should be supported by higher volume.

The above image shows the same BTC/USD chart with the trading volume added. Here we can see that the volume is higher at the beginning of the falling wedge pattern, but volume bars start to move lower as the wedge pattern extends. Once the price moves up from the wedge pattern with a bullish breakout, the volume begins to rise again.

A falling wedge is a reversal pattern, but investors can use it as both reversal and as continuation of a trend.

The price of a cryptocurrency moves by creating swing lows and highs. As a result, investors experience minor bearish swings within a major bullish trend. Therefore, a reversal from a minor swing level is ultimately a continuation of the major trend.

In the above image, the major bullish trend is marked in green where the price is moving up by creating higher highs. However, when we look inside the bearish correction, we see the falling wedge pattern begin to form, with the major trend resuming after a breakout. Therefore, although the falling wedge pattern appears after a bearish trend, it’s still within the long-term bullish trend.

The above image gives a practical example of a wedge pattern as the continuation of a bullish trend on a real chart. Here, the BTC/USDT market trend is bullish, when a falling wedge breakout from the minor bearish swing resumes the trend and makes new, higher highs. Therefore, the trend continuation is confirmed once the price moves above the falling wedge with a bullish candle.

The image above shows how to open a buy trade from the falling wedge breakout. In this method, the buying setup is valid as long as the price remains above the wedge pattern’s low. In addition, the stop-loss should be below the swing low, with some buffer. 

As the falling wedge pattern is a strong bullish continuation pattern, it often produces more profits. Therefore, traders can hold the buy position until the price reaches any significant resistance level.

With cryptocurrency trading, a falling wedge reversal pattern from a significant price level may provide more profits than it would in traditional markets. However, finding the right pattern from the ideal location is important. 

The falling wedge pattern appears in a swing low, indicating that bears are losing their momentum. Therefore, the first sign of a highly profitable wedge pattern is to find it after a considerable downward movement. It’s hard to determine whether the bearish trend will continue or reverse, so finding the pattern at a bottom increases the probability of a trend reversal. 

Look at the chart to see a strong downtrend at the beginning which is losing momentum at the bottom.

The above image explains how we can measure the strength of a bearish trend by looking at swing lows. If bears become unable to make new lower lows with a long distance, it’s a sign that they’re losing momentum.

Therefore, to trade the falling wedge pattern as a major market reversal strategy, we need to ensure the following confirmations:

Let’s see how the falling wedge pattern works on a real chart:

In the above daily LTC/USDT chart, the price collapses from the $400.00 resistance level but loses its momentum at $105.00. Meanwhile, the price forms a wedge pattern, as supported by the decrease in volume. As a result, once the bullish breakout occurs, it shifts the trend from bearish to bullish.

The trading approach of the falling wedge reversal pattern is similar to the continuation system. The trading entry becomes valid when the price moves above the falling wedge pattern with a strong bullish breakout. Again, the stop-loss should be below the support level, with some buffer. Trading in higher time frames often allows traders to hold the gain for years. However, taking some profits from strong resistance levels is important.

The above image shows how to open the buy trade from the support level using the falling wedge pattern. The image clearly shows that the volume decreases with the wedge formation, which is a sign of lower trading activity. However, once the price breaks above the SL level, the volume starts to rise. 

On the other hand, there is no guarantee that the price will come back to the support level after breaking above the falling wedge. In that case, traders can open the first buy entry immediately after the breakout, and the second entry after completing the correction.

Falling Wedge Patterns and Other Bullish Reversal Patterns

The falling wedge pattern is one of the bullish reversal patterns which form after downward pressure. However, there are many patterns which work like the falling wedge. Therefore, traders should know the key differences between the falling wedge and other patterns in order to better understand its trading accuracy.

Falling wedges and descending triangles look similar, and can confuse traders attempting to choose the correct pattern. The biggest similarity between the falling wedge and descending triangle is in their implications for price, allowing investors to understand what’s happening in the market and what might occur next. 

These patterns usually appear after a bearish trend and indicate that bulls and bears are both losing their momentum. However, the price direction after the two patterns isn’t the same. Any bearish breakout after a descending triangle increases the possibility that the existing bearish trend may continue.

, the price moves forward with lower highs forming, indicating that bulls are losing momentum. However, there are no lower lows formed, which signifies that sellers’ dominance remains unchanged. This repeated testing of the horizontal support indicates that the level is becoming weaker. Once the price moves below the descending triangle pattern, it will likely extend the existing bearish trend. 

Now, let’s move to the trading approach using the descending triangle pattern:

Based on the above example, let’s distinguish the key differences between the falling wedge and descending triangle:

 forms after a bullish trend, and moves lower by maintaining an equal distance between swing levels. It indicates that bulls are taking profits and they might continue the momentum. During the bull flag formation, the trading volume should dry up and push higher on the breakout. Identifying the bull flag in the price chart involves some complexity, as it contains several components. Traders need to have a clear understanding of bull flag components and trading approaches. 

Let’s look at the approach to trading with a bull flag pattern:

The above image represents the key differences between the bull flag and the falling wedge pattern. Although both of these patterns work as bullish trend continuations, there are some key differences that a trader should know:

While it’s difficult to find the ideal falling wedge pattern in perfect market conditions with cryptocurrency trading, investors can nevertheless apply the rules and concepts above to find lucrative trading opportunities.

Overall, falling wedge patterns are a great way to spot trend reversals and find profitable ways to buy before a new trend emerges. However, investors need to be aware of other factors that should be present to confirm the pattern. The key points that might help you to begin with this pattern are as follows:

Candlestick Patterns Professional Traders Use

 – A curated list of candlestick patterns most frequently used by traders

 – Learn the basics of candlestick patterns

 (Chart basics: trend, neckline, wedges)

Falling Wedge Patterns: How to Profit from Slowing Bearish Momentum

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