Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

In the past week, cryptocurrencies have surged as optimism grows that the US-China trade war may be easing. Following two days of talks, the US announced a 90-day tariff reduction on Chinese goods from 145% to 30%. ETH has been the biggest winner among the top 10 tokens, rising 40% in a week, though this has led to significant changes in implied volatility. BTC regained $100K for the first time since early February, with positive bias in OTM call skews, but its volatility market remains weak compared to ETH.

Please check out the report’s highlights.

Open interest for ETH surged by $900M over the past week, coinciding with a 40% rise in its spot price. This increase followed US-China trade negotiations, leading to a temporary 30% tariff reduction on Chinese goods. On May 12, 2025, after US Secretary of the Treasury Scott Bessent confirmed the agreement, open interest and perpetual trading volumes hit monthly highs of $9B and $23B, respectively. While open interest has stabilized, trading volumes declined after peaking during a brief pause in the crypto rally between May 11 and 12, 2025.

BTC volatility smiles suggest risk-on sentiment

Despite low short-term volatility expectations, BTC's short-tenor smiles indicate a continued risk-on sentiment, with a 5% skew toward out-of-the-money calls. Early in the week, put option volume surpassed $200M, outpacing $140M for calls, while open interest remains higher for puts than calls.

ETH has outperformed BTC for the second consecutive week, achieving a remarkable 59% return over the past month. This rally came with volatility: ETH's front-end volatility briefly doubled BTC’s 7-day tenor, leading to an inverted term structure. By Monday, ETH had pulled back some gains, causing front-end volatility to drop swiftly, a faster resolution than seen in previous inversions.

However, another rise in spot price toward $2.6K reignited volatility expectations. Open interest and options trading for ETH remain skewed toward calls, with volumes exceeding $150M on May 13, 2025, coinciding with a second price surge after a brief retreat on May 12, 2025.

Advanced

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Bybit X Block Scholes crypto derivatives analytics report (May 14, 2025): BTC volatility remains weak relative to ETH

Strategic Bitcoin reserve (SBR): Established on March 6, 2025, integrating Bitcoin into national reserves

Strategic Bitcoin reserve hopes are all the rage

On March 6, 2025, US President Donald Trump signed an executive order to establish the nation's first strategic Bitcoin reserve (SBR). This pivotal initiative positions Bitcoin alongside traditional reserves like gold and oil, signaling a significant endorsement of digital assets by the federal government. The SBR aims to centralize and manage all Bitcoin acquired through legal forfeitures, ensuring these assets serve as long-term strategic holdings rather than being sold off.

The creation of the SBR reflects Trump's broader vision of making the US a global leader in cryptocurrency. By integrating Bitcoin into national reserves, the administration seeks to harness the benefits of digital currencies while providing a hedge against economic turbulence. This strategic move has also spurred state-level policies, as seen in New Hampshire, where legislation was recently passed allowing state investments in cryptocurrencies and precious metals. Such developments indicate a growing trend of governmental adoption of digital assets, reinforcing the legitimacy of cryptocurrencies in the financial landscape.

Institutional accumulation drives down Bitcoin availability

In the private sector, institutional investors are increasingly accumulating Bitcoin. Companies like Strategy (formerly MicroStrategy) have expanded their holdings significantly, purchasing an additional 13,390 BTC for $1.34 billion, which brings their total to 568,840 BTC. Similarly, Metaplanet Inc. invested $126 million to acquire 1,241 BTC, surpassing the national Bitcoin holdings of some countries. This trend highlights a shift in Bitcoin ownership, with retail investors often taking profits during market rallies, leading to a redistribution of Bitcoin toward institutional entities.

As of May 13, 2025, over 19.86 million BTC have been mined. Wallets holding at least 100 BTC account for 60.84% of the total supply, while those with 10 or more BTC control 82.51%. With Bitcoin's price once again having surpassed $100K, it becomes evident that only about 17.5% of Bitcoin is held by wallets with less than $1 million in BTC. This concentration of ownership raises concerns about market accessibility for smaller investors.

The 10–100 BTC tier is primarily composed of small institutional investors, while wallets with over 100 BTC are predominantly held by institutions and liquidity providers. This oligarchic trend suggests that as cryptocurrency market caps rise, retail traders may feel pressured to sell during downturns, further consolidating wealth among larger holders. Notably, the increasing costs associated with 

, such as electricity and equipment, compel many miners — often retail investors — to sell portions of their holdings to cover expenses, exacerbating this trend.

Bitcoin concentration leaves smaller investors at disadvantage

The establishment of the SBR represents a critical milestone in the integration of digital assets into national financial strategies, positioning the US at the forefront of the cryptocurrency revolution. As of mid-May 2025, Bitcoin's price has fluctuated between $102K and $105K, maintaining an optimistic long-term outlook despite short-term volatility. Continued institutional interest, bolstered by supportive governmental policies, enhances the legitimacy and stability of Bitcoin as an asset class.

However, as smaller investors continue to sell during market rallies, larger wallets are increasingly accumulating supply, tightening their grip on the market. Currently, over 80% of Bitcoin's supply is held in wallets containing $1 million or more in BTC. This trend suggests that while individual portfolios may grow, retail investors could find themselves at a disadvantage in an increasingly concentrated market.

In conclusion, the strategic Bitcoin reserve and the surge in institutional investments signal a positive shift for Bitcoin's legitimacy and its role in the global financial system. However, the growing disparity in Bitcoin ownership underscores the need for retail investors to navigate the market carefully. As these dynamics evolve, awareness of trends in institutional accumulation and wealth concentration will be crucial for all participants in the cryptocurrency ecosystem.

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Bybit x Santiment social sentiment report: Bitcoin reserve hopes leave Bitcoin holdings more concentrated

The Smart Copy Mode is a simple-to-use copy trading feature on Bybit that lets you reap profits from the crypto market even without prior trading experience.

Trading cryptocurrencies can be a lucrative way to earn from the ever-volatile crypto market. However, most people shy away from it due to the intense 

Thankfully, the world of trading now has helpful tools that have simplified crypto trading and made it easier even for beginners to make money from price movements.

First launched as part of a major upgrade in early 2023, Smart Copy Mode offers a simplified way to follow experienced traders known as Master Traders and automatically mirror their strategies. Today, it's one of the easiest and most intuitive ways for anyone, even beginning traders, to tap into the expertise of top-performing traders on Bybit and earn profits.

In this article, we’ll explore how Bybit Smart Copy Mode works and how you can safely make profits as a 

Smart Copy Mode is a simple-to-use copy trading feature on Bybit that lets you reap profits from the crypto market even without prior trading experience.

 Smart Copy Mode is part of the three major upgrades to the Bybit Copy Trading platform 

As of 2025, it remains one of the simplest and safest ways for users to realize returns from automatically mimicking successful Master Traders on the platform.

The Smart Copy Mode requires only three steps to follow a 

 and start earning. All you’ll need to do is enter an investment amount (minimum 100 USDT), select a Bybit account to transfer the funds from and click the 

The entire process is optimized for ease and risk control, making it ideal for anyone looking to trade without micromanaging their positions.

Here are some key features of the Bybit Smart Copy Mode that make it easier to trade while minimizing risks:

Rather than blindly copying a Master Trader’s full position size, Smart Copy Mode calculates a ratio based on both your balance and the Master Trader’s, helping you manage exposure proportionally.

Case in point: Let’s say a Master Trader has 10 BTC in their account but they enter a long position with only 1 BTC. In typical copy trading, a Follower who has 1 BTC in their account will automatically copy the trade with the whole 1 BTC, which exposes their entire portfolio.

However, with the Smart Copy Mode, a ratio calculated based on the available balances in the Follower’s and the Master Trader’s accounts will be exposed for copy trading. In this case, if the ratio is calculated to be 10%, the Follower’s copy trade amount will be 0.1 BTC instead of their full balance of 1 BTC. 

This proportional sizing is especially useful for beginners who may not want to expose their entire portfolio to a single trade.

Another amazing feature of the Smart Copy Mode is the Bybit CopyGuard which is designed to limit losses by adding an extra layer of protection for Followers. While most Master Traders strive to consistently implement successful trading strategies, it’s not uncommon to find some trades that will incur losses.

In such instances as a copy trader, you will incur losses similar to the Master Trader. That’s where the Bybit CopyGuard feature comes in handy.

With CopyGuard turned on, all of the Follower’s trades are optimized in the sense that the entry will always be at an optimal price not worse than that of the Master Trader. If an optimal price is not attained, the trade won’t be copied. However, note that at the point of trade execution, 

 may occur, causing small price discrepancies. However, CopyGuard filters out major price differences that could lead to instant losses. 

To give Followers even greater control over their risk exposure, Bybit now offers a Trailing Stop feature within Smart Copy Mode.

This tool automatically adjusts your exit point based on your account’s highest recorded equity. You simply set a retracement percentage (e.g., 20%), and if your equity drops by that percentage from its peak, all positions will be closed, locking in profits and limiting potential losses. 

Let’s say your account equity fluctuates as follows: 500, 450, 600, 900, 800, 1,000, 800. With a 20% retracement rate, the trailing exit equity adjusts accordingly: 400, 400, 480, 720, 720, 800, 800. When your actual equity drops to 800, the trailing stop triggers and your copy trading positions are automatically closed. 

, the final equity upon exit may differ slightly from the calculated exit equity.

The Trailing Stop feature is especially useful for volatile markets, helping you secure gains without manually monitoring every trade.

Together, Bybit’s copy by ratio, CopyGuard and Trailing Stop features work together to ensure that Followers have an extra layer of protection against losses when engaging in copy trading. 

Smart Copy Mode vs. Advanced Copy Mode: Which is better?

 allow you to choose between the Smart Copy Mode or the Advanced Copy Mode. While both provide an avenue for you to successfully copy a Master Trader’s strategy, there are several differences between the two that may make you opt for one over another. They are:

From the above comparison, it’s highly recommended to go for the Smart Copy Mode if you are a beginner to crypto or copy trading since it provides you with loss-limiting features before you learn your way around the field. For advanced traders, you can go for the Bybit Advanced Copy Mode or stick to the Smart Copy Mode.

Smart Copy Mode has made it easier to realize gains from copy trading.

 Regardless of your status as a beginning or advanced trader, you can have the assurance of a safe trading experience even with margin trading as all the risks are mitigated for you through the Smart Copy Mode.

Compared to the Advanced Copy Mode, the copy by ratio, CopyGuard 

 features within Smart Copy Mode help limit losses through reduced risk exposure. The enhanced automated settings on Smart Copy Mode are sure ways to successfully copy Master Traders without fear of wiping out your account. So, 

Beginner

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Bybit Smart Copy Mode: The way to secure copy trading profits

Invest like a VC with just $20. Common Wealth (WLTH) opens access to early-stage crypto projects through a transparent, community-driven platform.

The traditional venture capitalist (VC) investing model is often elitist and out of reach for many retail investors. While this is particularly the case in the world of traditional finance (TradFi), access to promising early-stage crypto assets is also frequently reserved for larger entities, namely institutional investors and 

. When we hear about a wildly successful crypto project and its token, we often find that its early backers are well-known investment funds or cashed-up VCs. These early investors are the ones who benefit the most from the token’s meteoric rise on the market.

 chain that aims to democratize the way VC investment works in the crypto industry. By using a community-driven approach to sourcing and investing in promising projects, the Common Wealth platform reduces barriers to entry to VC activities. Smaller-scale retail investors, both casual and experienced, are the primary beneficiaries of Common Wealth's unique approach to crypto investment.

Common Wealth has partnered with a network of notable crypto investors who refer high-potential projects to the platform, where these projects are carefully evaluated and qualified to be included in the investment products available to the user community. The entire evaluation process is also driven by community governance procedures, making it transparent and secure. Thanks to Common Wealth, investing in high-potential early-stage crypto opportunities is now open to anyone — even investors who want to start with as little as $20.

 (WLTH) is a decentralized platform that allows anyone to become a crypto VC by using a vetting-based, democratized, community-driven approach to selecting promising cryptocurrency investment opportunities.

The core idea behind the project is to tear down barriers to entry for crypto investment, particularly concerning early-stage promising ventures. Common Wealth has partnered with a group of prominent, savvy crypto investors (referred to as “Oracles”) who refer high-potential crypto investment opportunities to the platform. All the referrals are based on projects or assets that at least one so-called Oracle has personally invested in. As of May 2025, the platform works with ten Oracles, all of whom are notable investors with solid track records and standing in the crypto investment world.

The platform's governance community scrutinizes each referred project via “Oracle Ask Me Anything” (AMA) sessions, proposal workshops and analytics. Community investors then vote to decide on the projects' final eligibility. Any Common Wealth user can invest in qualified projects for as little as $20.

There are two main types of investors on the platform: casual and community members. The former typically invest smaller amounts, and pay with fiat currency using credit or debit cards, greatly simplifying access to the selected projects for users without an affinity for cryptocurrency transactions. Casual investors are normally those who adopt a hands-off approach to crypto investing and tend to start with smaller investment amounts.

Members of the second group, community members, invest larger amounts, or actively participate in the decision-making process for project selection. They’re the core of the governance community on Common Wealth. These investors use cryptocurrency to invest, paying with the 

The Common Wealth project was launched in February 2024 on the Base Layer 2 chain. In May 2025, it debuted its native token, WLTH.

All investment opportunities offered on Common Wealth are in the form of funds that provide exposure to promising projects and assets. For instance, the platform’s Priceless Fund invests in 14 high-potential 

 startup projects, while the Alpha Fund is based on early-stage projects in the areas of artificial intelligence (AI), the 

 (RWAs), decentralized physical infrastructure networks (DePINs) and gaming.

Unlike traditional investment funds, Common Wealth funds are completely permissionless and noncustodial, operating through blockchain smart contracts. As such, no central entity can influence fund management, thus ensuring transparency and discouraging vested interests.

Some funds are based on contributions from the wider user community, and are typically capped funds. There are also perpetual funds, which are funded by the investor community that participates in on-platform governance.

Bundles are Common Wealth funds based on a dynamic mix of assets satisfying certain criteria, e.g., a specific crypto niche. The platform has launched three such bundled products: 

Since the bundles are dynamic, the top five assets may switch according to market sentiment. All allocations within the bundles are equally split between their five assets. For instance, if you invest $100 in a bundle, each of the five assets in it will be allocated $20 of your investment.

The Common Wealth platform charges three types of fees:

When you invest in a Common Wealth fund, you’re issued a 

 (Slice NFT) that denotes your share of capital in the fund. Slice NFTs are freely tradable on the market, investors can quickly access liquidity by selling their Slices. Since these NFTs are fractionalized, you can sell a part of your Slice or the whole of it, per your preference.

Distributed Autonomous Operating System (DAOS)

The Common Wealth Distributed Autonomous Operating System (DAOS) is based on a set of 

 that automate the entire workflow of the platform’s governance processes. Project considerations, analytics related to candidate projects, vote management and other functions related to decentralized governance are handled by the DAOS.

 (DAO) consists of a set of rules and an on-chain community, the Common Wealth DAOS is an entire permissionless system of interoperable autonomous nodes that automates and powers all the platform’s governance elements and procedures.

What is the Common Wealth crypto token (WLTH)?

 asset issued on the Base Layer 2 chain. The token has a wide range of functions on the platform. While investments in Common Wealth are based on the USDC stablecoin, all other key functionalities are enabled via WLTH. These include:

WLTH is a capped asset with a maximum supply of 1 billion. As of mid-May 2025, its total supply stands at around 984 million. The chart below shows the token's supply allocation shares and vesting periods upon its launch in May 2024.

As of May 16, 2025, the WLTH token is trading at $0.003877, which is 98.2% lower than its ATH of $0.2148 on Jul 22, 2024 and 82.8% higher than its ATL of $0.002121 on Apr 18, 2025.

Long-term price forecasts for WLTH are mostly bullish.DigitalCoinPrice 

 of $0.0129 in 2027 and $0.0192 in 2030, whileCoinCodex 

 at around $0.0042 in 2027 but rise to $0.014 in 2030.

VC investment in financial markets remains an exclusive club that isn’t easily accessible to everyday retail investors. In most cases, this applies to the crypto market as well. Common Wealth's value to the broader crypto community lies in designing a system that makes investment in promising web3 initiatives accessible to everyone. The platform's novel model creates an opportunity to involve millions of individuals in the VC game. This could lead to significant growth in overall web3-based VC funding, and positively affect the entire crypto investment landscape over the coming years. Finding a future star in the crypto market with as little as $20 has never been easier — thanks to Common Wealth and the VC tools it provides!

Intermediate

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Common Wealth (WLTH): Invest like a VC — without being one

Candlestick

Trading

As a continuation pattern, a bear pennant indicates an extension of a strong downtrend. Learn how to spot the pattern and trade with it.

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 pattern that can help you spot strong downtrends in crypto. Crypto traders enjoy bearish pennant patterns because they’re easy to spot and, once identified, can tip you off to long and deep corrections. As a result, the pattern can also help you spot false bottoms.

In this article, we’ll review what a bear pennant pattern is, what it looks like and how to confirm the pattern with indicators. Then, we’ll review in detail how a trader sets up their trade with the risk and take-profit levels noted. Finally, the bear pennant pattern isn’t always 100% accurate, so we’ll review some of its limitations.

A bear pennant is a chart trading continuation pattern in which, after a strong move lower, prices pause and consolidate briefly, then break down further, resuming the larger correction. 

The pattern gets its name from the consolidation, which often looks like a pennant as prices wedge together before breaking down further. The bear pennant pattern is the opposite of the bull pennant chart pattern.

A bear pennant is formed when a cryptocurrency falls significantly, yet buyers believe it’s not inexpensive enough yet. The buyers hold out and don’t buy. The traders who are short become nervous and exit the position by buying it back. As a result, the crypto’s price increases a little, but on weak volume. 

Over time, the volume during this consolidation period tends to be weak. The cryptocurrency seems to mindlessly bounce within a range, making no progress. After a short period of time, the buybacks cease and the trading volume tends to fall as the last traders are shaken out. When volume fades, the sellers show up again and continue to push the market lower, resuming its downtrend.

A bear pennant has a lot of similarities to a 

 in technical analysis. Both patterns are consolidating a downtrend, which then leads to a further break lower in price. However, there’s a slight difference in their shape. The bear flag has a rectangular look in the consolidation phase, while the bear pennant resembles a triangle.

Analysts debate whether the bear pennant or bear flag is the more powerful pattern. On the one hand, the triangular shape of the bear pennant suggests there are hardly any buyers in the market, which tends to lead to shorter consolidation periods. On the other hand, the rectangular shape of the bear flag is effective at “faking out” potential buyers, trapping them into selling as the downtrend picks up momentum.

The debate will continue, but make no mistake: both patterns point to strong bearish downtrends coming. 

There are three phases to a bear pennant. The crypto market will experience a large, strong and deep correction. Oftentimes, the correction will appear relentless, as if it won’t stop (point 1 in the below diagram).

Then, all of a sudden, the downtrend stops, and a small rally begins to develop. Unfortunately, the rally doesn’t have a lot of strength or volume to sustain it and quickly fades away. At this point, the rally has retraced less than 1/3 of the decline, and definitely remains in the lower half of the original decline (point 2).

The short-term rally soon fades to another correction. The decline is as weak as the rally and the cryptocurrency begins to trade in a sideways range. There’s one distinctive feature of this sideways movement: the upper and lower boundaries of the range become compressed as time passes. When you draw trend lines along the outer edges of the consolidation, they converge to form the shape of a contracting triangle (point 3).

This triangle is critical to defining the pattern, which leads to a strong continuation lower. During this consolidation, trading volume contracts as well. The fight between the bulls and the bears looks more like a truce: both bulls and bears simply don’t show up anymore and stick with their positions as the consolidation drags on. At this point, the pattern looks like a triangle on the bottom of a stick, and the bearish trade is set up.

Eventually, the consolidation leads to a breakout lower as the sellers come back in full force, just as strong as they were in the initial correction (point 4). This is partly due to the buyers who thought they were buying cheaply: now, they have to turn around and sell in a strong down-trending market. The imbalance of sellers versus buyers is so large that price readjusts rapidly lower. Sometimes, the length of the secondary downtrend can be as large as the first correction, where the consolidation marks the midpoint of the entire decline. 

The best indicators to confirm a bear pennant are its shape, as well as where the pattern forms within the previous downtrend. There are some additional indicators that can be used to help confirm the bear pennant, but those indications may not be the most accurate. A correct bear pennant pattern should have a contracting triangle shape rather than a rectangle shape.

We previously discussed how the shape of the bear pennant must be a triangle at the bottom of a stick. The triangle portion of this pattern has to appear in the lower half of the stick, most likely within the lower third of it.

The duration of the triangle will be brief, as the market is getting ready to unload in a deeper correction.

Volume can provide a big clue about the validity of the bear pennant pattern. Usually, the initial decline occurs on a lot of trading volume. Then, as the cryptocurrency consolidates during the triangle pennant portion of the pattern, the volume will fall as both buyers and sellers stand aside.

As the triangle completes, volume tends to pick up again as the market corrects towards much lower levels. Remember, trends tend to follow volume. Therefore, a consolidation on weakening volume suggests the rally is likely temporary, and will be completely retraced.

When a cryptocurrency is in a fast trend, volatility tends to pick up. We can measure the volatility as a function of the high and low of each price period, which is called a range. When the range expands, it indicates volatility is on the rise and that the cryptocurrency is likely to trend in a specific direction. When the range falls, it indicates consolidation is likely taking place with little net movement.

To determine if the range is expanding or contracting, add the 

 (ATR) indicator to the bottom of your charts with a one-period setting. If the subsequent line on the chart is rising, that indicates increased volatility. If the line is falling, it suggests decreasing volatility.

Once you’ve identified a bear pennant, congratulations — because you’ve completed one of the toughest parts to trading the pattern. The subsequent trade can be rewarding, as the setup is quite simple and fairly straightforward.

Identifying a Bear Pennant Pattern on a Crypto Chart

After a long and steep rally, ETH topped in May 2021 and began to collapse. In about one week’s time, ETH corrected 25% to the low on May 16. This steep correction was the first phase of the bear pennant pattern. Let’s refer to the chart below.

ETH then briefly rallied off the low, but the rally didn’t last long or extend very far. The ETH rally retraced 38% of the May downtrend, placing it in the lower portion of the sell-off.

Ethereum begins to chop around sideways, making no progress either to the upside or downside. This sideways chop occurs on contracting volume. The candlestick ranges contract. The trend lines shaping the outer edges of the pattern contract, too.

This formation creates an ideal setup for a bear pennant trade.

After spotting the pattern, it’s time to plan the trade’s entry.

The easiest entry point is the lowest point of the pattern. Set an entry order to sell short if the market falls to new lows. Placing an entry at the pattern’s low point allows you to confirm that ETH is ready to trade to lower levels. If it does, you tend to see an explosion lower, leading to another large downtrend. 

The stop loss will be placed above the pattern near the recent highs. 

The best place for a stop loss is just above the 

 of the pattern. That way, if ETH does rally above the resistance line, then the bear pennant pattern is voided, suggesting another pattern has been unfolding.

On many occasions, the bear pennant is at about the halfway point of the decline. You can simply measure out the first decline, then project it at the end of the bear pennant near the last touch of the resistance trend line. The 

 is very handy for helping you measure out situations like these.

For ETH in the chart above, this places a take-profit target near $2,300.

In fact, a few days later ETH did fall hard, bottoming at $1,850.

Pennant Patterns vs. Triangle Patterns: Differences 

What’s the difference between pennant patterns (bullish and bearish) and triangle patterns? At first glance, they’re very similar and overlap in a lot of areas. The pennant pattern does include a triangle-like shape during the consolidation phase. However, the main difference is what happens before and after the triangle — and how long the triangle itself lasts.

Leading into the bearish pennant pattern, there’s a deep and strong correction. Then, the pattern consolidates into a triangular formation. However, with a regular triangle pattern, there doesn’t have to be a strong trending move preceding the triangle.

Secondly, after the triangle in a pennant pattern forms, it’s very clear in which direction to expect the pennant to break. It will break in the direction of the preceding trend, which — in the case of a bearish pennant — is to the downside. With a regular triangle, the breakout might happen to the upside or downside.

The third main difference between a pennant pattern and a triangle pattern is how long they last. The triangle portion of a pennant tends to be shorter in duration than that of a typical triangle pattern. The swiftness of the pennant’s triangle happens because the emotions of the correction are high, and traders aren’t buying into the consolidation of the downtrend 

. In contrast, a regular triangle pattern can last years, and be preceded by small trends.

An effective pennant can tip you off to a powerful trend with a good risk-to-reward ratio trade. However, not all developing pennants are 100% accurate.

If the triangle consolidation phase becomes prolonged, then the possibility of a continuation lower lessens. This means the likelihood of an outright reversal increases, which can frustrate bearish traders.

One way to avoid this frustration is to wait for a breakdown below the lows of the triangle, rather than trying to time a short sell entry at the triangle’s high.

Another limitation of the bear pennant pattern is that if you follow it on a minute chart, the data coming in from other confirming indicators may be flawed. There simply isn’t enough data feeding into the volume or ATR indicator to produce obvious signals. As a result, a smaller chart time frame may not show confirmation of the pattern, even if it eventually plays out.

The bear pennant pattern is an easy-to-spot pattern that’s simple to trade. The structure of the pattern and the indicators that confirm it is simple to follow. Once spotted, the subsequent trades can establish excellent risk-to-reward ratio opportunities.

As a result of this simplicity, the bear pennant pattern is a favorite among crypto traders. 

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)

Bear Pennant: How to Trade with a Bearish Chart Pattern

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Bear Pennant: How to Trade with a Bearish Chart Pattern

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