Descending Channel

Descending Channel is a technical analysis pattern characterized by a pair of parallel, downward-sloping lines that contain the price action, forming a triangular shape. The upper line, or resistance, is drawn using higher highs, while the lower line, or support, is drawn using lower lows.

Descending channels matter as they indicate a downtrend in the market. Traders often use them to identify potential selling opportunities. For instance, a break below the lower line could signal a bearish trend continuation, while a break above the upper line might suggest a potential trend reversal.