Understanding the Falling Window in Trading
A falling window, commonly called a gap down, happens when two consecutive bearish candles create a notable price gap with zero overlap between them. This pattern is a crucial signal in technical analysis.
What does it tell you? Strong bearish momentum. When this gap appears, it typically indicates that sellers are in firm control and conviction is high. The market has literally "jumped down" overnight or between sessions, showing that buyers couldn't hold the line.
Why traders watch it: In crypto markets where 24/7 trading applies, gaps can form acr