Consolidation
Stabilization phase before a new move
Beginner-friendly explanation
Consolidation is a phase where price moves sideways in a flat range. It's a market pause before the next move. Example: After a fast rise, Bitcoin’s price stays between €28,000 and €29,000 for several days: it’s consolidating.
Intermediate-level insight
In technical analysis, consolidation can form patterns: rectangle, triangle, flag. It shows a temporary loss of momentum before continuation or reversal. Example: ETH rises, then forms a symmetrical triangle: the consolidation often precedes a new breakout.
Advanced perspective
Consolidation is a rebalancing of supply and demand, observable via volatility compression, volume drop or ATR. Breakouts post-consolidation are strong signals used in systematic trading. Example: A bot detects a drop in ATR and volume on a crypto pair: it prepares for an auto-entry on breakout.
Technical Analysis & Charting
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