I’ve been observing how many traders get lost in the complexity of technical analysis, when in reality it all comes down to recognizing simple patterns that repeat over and over again.

One that I’ve been following for years and that really works is the wedge. Basically, it’s when you see two trend lines narrowing, compressing the price into an increasingly smaller range. That squeeze always ends in something strong, either upward or downward.

The difference between a bearish wedge and other formations is important. In a bearish wedge trading setup, both lines rise, but the support line rises with a steeper slope than the resistance line. That sounds contradictory, but it’s exactly what tells you that a drop is coming. I’ve seen this in BTC hundreds of times, and it works pretty well for preparing ahead of the move.

Then there’s the descending wedge, which is the opposite. Both lines go down, but the resistance drops more sharply. Typically, it then explodes upward. People often confuse this with triangles, but they’re different things. A triangle usually has one horizontal line and one slanted line, and generally continues the trend. A bearish wedge trading setup, on the other hand, almost always reverses what was happening.

What I like about these patterns is that they give you time to react. You see the compression, you get prepared, you position your stop loss, and you wait for the breakout. It’s not exact science, but it’s much better than trading blindly.

The question I always ask myself is whether you prefer to wait until the bearish wedge trading setup is clearly defined, or whether you jump into the triangle as soon as it forms. Personally, I wait for confirmation of the breakout, but everyone has their own style.

Remember that all of this is only technical analysis for observation—not investment advice. Do your own research before making any decision in the market.