Technical analysis continues to be the predominant research method for active cryptocurrency traders. Fundamental analysis, on the other hand, is more adequate for investors who trust in the long-term growth of their market positions. Given the high volatility of the cryptocurrency markets, technical analysis of certain patterns is often all that traders have to rely on, and one specific pattern that many seasoned traders have been using in recent weeks is called the rectangle indicator.

This pattern follows basic market psychology that traders express through observations based on principles of economics. Bullish trends can often be countered with bearish trends; what this suggests is that traders are split in expectations, thus creating a trading range that can be plotted as a rectangle on a chart.

A rectangle pattern has two parallel lines and is therefore more of an area of support or resistance, which traders can use to form their trading strategies. This pattern is also useful to spot bearish or bullish trends. Traders can apply technical analysis to various indicators such as the relative strength index and MACD. Some traders can use these technical indicators to spot trends as early as 5 to 20 days. Technical indicators will help traders spot possible reversals in the markets.

The trading range is the zone of indecision, where many cryptocurrency traders enter into their positions. Traders wait to enter when price enters this zone. Prices generally remain range bound until prices reach either end of the rectangle and eventually break out or converge.

The rectangle or trading range was first recognized by Richard Dennis in 1964 as an important trading pattern in the Dow Jones Industrial Average index. He noticed a trading range in the stock market, which is essentially a consolidation zone. Traders can identify the presence of a trading range when the price of the stock is trading between the highest and lowest prices of the trading range. Traders can utilize this information to enter and exit the market in time to take advantage of this trading pattern. In recent years, some of the world's largest technology companies have used the rectangle or trading range to their advantage, entering and exiting when prices are in the middle of the trading range.