Formation of a boring candlestick between bullish and bearish exciting candlesticks in a uptrend. SUPPLY ZONE(RALLY BASE DROP)

A rally base drop(RBD) is a price pattern that forms when the market rises, reaches a peak, and then sharply drops. The pattern is characterized by three phases:

1. A sharp rise in price, which is usually driven by buying pressure from bulls.
2. A period of sideways price action, which is often characterized by narrow trading ranges and low volatility. This phase is sometimes referred to as the "base" of the pattern.
3. A sharp drop in price, which is usually driven by selling pressure from bears.

The rally base drop pattern is considered to be a bearish reversal pattern, as it suggests that the bulls have lost control of the market and the bears are now in charge. Traders who identify this pattern can look to enter short positions on a breakout from the base.

Here are some of the key features of a rally base drop pattern:

• The first candle in the pattern is usually a large bullish candle, which indicates a significant rally.
• The second candle in the pattern is often a doji or spinning top, which indicates indecision in the market.
• The third candle in the pattern is usually a large bearish candle, which indicates a reversal of trend.
• The base of the pattern is usually narrow and characterized by low volatility.
• The breakout from the base is usually sharp and impulsive.

The rally base drop pattern is a powerful reversal pattern that can be used to identify bearish opportunities in the market. However, it is important to remember that no pattern is perfect and there is always a risk of false breakouts. Traders should always use a stop loss to limit their losses in case the pattern does not work out as expected.

Here is an example of a rally base drop pattern in the BTC/USDT:

BTC/USDT monthly chart

This is just one example of a rally base drop pattern. The pattern can vary in size and shape, but the key features are always the same. Traders who can identify this pattern can look to enter short positions on a breakout from the base.

Here are some of the things to keep in mind when trading the rally base drop pattern:

• The pattern should be confirmed by at least two candles.
• The base of the pattern should be narrow and characterized by low volatility.
• The breakout from the base should be sharp and impulsive.
• Traders should use a stop loss to limit their losses in case the pattern does not work out as expected.
• The rally base drop pattern is not always a reliable indicator of a trend reversal. Traders should always consider other factors, such as the overall market trend, before entering a trade.