During the continuous downward and upward trend, the K line becomes rounded, and for many traders, it is very difficult to determine the market direction.
Bullish Rounding Bottom
During the long-term decline, the fluctuation between the buyers and sellers gets more extreme and the K line becomes U-shaped. This curve also reflects the consolidation period. If you pay more attention, you will find two clear lows, one lower than the other, followed by an upward wave in price. If this price hike is above the previous resistance level, it is considered a breakout.
In addition, this pattern always forms in the long downward trend and is well known for trend reversal. This trend indicates the sellers are exhausted and buyers are beginning to step in. If you encounter this trend, you should create a long position.
Bearish Rounding Top
Bearish Rounding Top pattern indicates a downward price trend. This pattern always forms during the uptrend, when the price shows a series of lower lows, bounces slightly, and moves back again and again.
This pattern indicates strong selling pressure, and it is highly possible that prices will fall in the near term. To ensure this signal, you can identify a bearish rounding top by looking at two clear lows and two clear highs in the K-line curve.
However, this pattern is downward but shows some volatility, therefore becoming a deceptive signal for novices to open the long position. When you encounter this curve, always verify with important insights into the future price of the coin. Moreover, you can also verify the volume and price action to take appropriate decisions.
In summary, both the top and bottom K-line curves are deceptive, and traders open the wrong position. It is always a better idea before taking any decision, you should verify with other indicators and market sentiments.
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