What Is Wedge?
A wedge is a chart pattern formed by two converging trendlines, both sloping in the same direction. A rising wedge (both lines slope up, with the support line rising faster) is bearish; a falling wedge (both lines slope down, with the resistance line falling faster) is bullish. Wedges differ from triangles because both trendlines slope in the same direction.
How Wedge Works
Rising wedges form during uptrends as each successive high and low is higher, but the range narrows — momentum is fading. The breakdown below the support line triggers the bearish move. Falling wedges form during downtrends as each successive low is lower but the range narrows — selling pressure is exhausting. The breakout above resistance triggers the bullish move.
Why It Matters for Traders
Wedges are among the most reliable patterns in crypto, with falling wedges having a particularly high breakout success rate. The pattern works because it represents a compression of energy — buying and selling interest is narrowing toward a point, and when one side gives way, the accumulated energy is released. The measured move target is the widest part of the wedge projected from the breakout.