Downside Reversal
A "Downside Reversal" is a technical analysis pattern that indicates a potential change in the direction of a security's price. It typically occurs after a downtrend, where the price briefly moves lower before reversing and moving upward. This pattern can signal to traders that the selling pressure may be weakening, suggesting a possible buying opportunity.
Traders often look for specific indicators, such as increased volume or bullish candlestick formations, to confirm a downside reversal. Recognizing this pattern can help investors make informed decisions about entering or exiting positions in various assets, including stocks, commodities, or cryptocurrencies.