How to tell if a chart is bullish or bearish?

A bullish pennant is a distinct technical pattern observed in the financial markets, particularly in cryptocurrency trading. This pattern signals a potential continuation of an upward price trend, indicating bullish sentiment among traders.

The formation of a bullish pennant begins with a sharp and steep increase in prices, represented by the flagpole on the left side of the chart. This initial surge in prices is followed by a period of consolidation, where prices fluctuate within a narrower range, forming the body of the pennant.

The consolidation phase of a bullish pennant is characterized by a decrease in trading volume, which can be interpreted as a sign of exhaustion among sellers. This reduction in selling pressure allows buyers to regain control and push prices higher.

In contrast, a bearish pennant is a technical pattern that indicates a potential downward trend in prices. This pattern is similar to a bullish pennant but with the key difference being that the flagpole forms on the right side of the pennant, indicating a reversal of the initial upward momentum.

During a bearish pennant, trading volume typically decreases as prices consolidate within a narrowing range. This decrease in volume can be seen as a sign of weakening buying interest and a potential shift in market sentiment towards bearishness.