Trendline
A trendline is a sloped line on a chart drawn through the lows in an uptrend or the highs in a downtrend. It shows the direction and angle of the move.
How it works
For an uptrend line you take at least two clear rising lows and connect them. A third touch with a bounce confirms that the market respects the line. In a downtrend the line is drawn along falling highs. The line acts as sloped support or resistance.
The more touches and the higher the timeframe, the more the line matters. Very steep lines break quickly, gentler ones hold longer. On long crypto charts, lines are often drawn on a log scale, because on a linear scale a big rally distorts the slope.
A break of the trendline says the trend has slowed, but not necessarily reversed. Price often comes back to the line from the other side (a retest), and only then does it become clear whether direction has changed.
ETH makes a low at $2,800 and a week later at $2,900. A line through those points rises $100 a week, so a week later it sits around $3,000. If price dips to $3,000 and bounces, that is the third touch confirming the line.
The mistake is fitting the line to the conclusion you want: redrawing it after every break or pulling it through random wicks. Build the line from clear swings, using either bodies or wicks, but the same way for every point. If a candle closes through the line, accept it instead of drawing a new one to suit your position.
Questions and answers
What is a trendline in simple terms?
It is a sloped line connecting the lows in a rise or the highs in a fall. It shows where price is heading and how fast.
How many touches does a trendline need?
You can draw one from two points, but it is usually seen as confirmed after a third touch with a price reaction.
What does a trendline break mean?
It means the current pace of the trend has been broken. It can be the start of a reversal or just a shift into a range, so traders wait for a retest and confirmation.
Related terms
Read next
The classic scenario: level, breakout, return, and a trade plan with entry, stop and target.
Read →How to read a candlestick chart: Japanese candles for beginnersCandlestick charts are the most popular way to look at price. Here is how one candle works, how to read them in a row, and the…
Read →Triangle patternA triangle is a chart pattern where price swings between two converging lines and the swings get smaller. It can be…
Updated: 2026-10-19