2025-06-28

Lower Lows

Lower lows occur when price forms a new bottom below the previous one, signaling increased selling pressure and the continuation of a downtrend in the market.

What Are Lower Lows?

Lower lows describe a price pattern where each new low on a chart falls below the previous low. This formation reflects growing selling pressure and is a core component of a downtrend. Traders use lower lows in combination with lower highs to confirm bearish market structure.

When assets continue making lower lows, it signals that support levels are failing and sellers are dominating.

Why Lower Lows Matter

  • They help confirm a downtrend
  • They indicate momentum is shifting downward
  • They show weakening demand and strong supply
  • They can signal bearish continuation setups

Lower lows offer traders visual confirmation of ongoing weakness and help determine where not to enter long positions.

How to Identify Lower Lows

Price Action

Mark the lows on your chart. If each one is progressively lower than the last, you are seeing lower lows. At least two are required to identify a pattern.

Volume Confirmation

Lower lows forming on increasing volume add strength to the bearish signal.

RSI Behavior

RSI often drops into oversold territory when lower lows form. If price forms lower lows but RSI does not, it may signal bullish divergence and potential reversal.

Trendline Support

Connecting the lows in a downtrend often forms a descending support line. A break of this trendline can lead to acceleration in selling.

Example of Lower Lows

Imagine Ethereum drops from $1,800 to $1,600, then attempts to recover but only reaches $1,700. It then falls again, breaking to $1,500.

The move from $1,600 to $1,500 is a lower low, and when paired with a lower high, it confirms a bearish structure.

Traders watching for this structure may short at the next lower high or place alerts near the breakdown zones using platforms like Phalerta.

Lower Lows in Trading Strategy

Lower lows are typically used:

  • To confirm bearish trends
  • As part of pattern recognition, like descending triangles
  • In breakdown strategies, where price breaks previous support
  • To set stop-losses above failed supports
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FAQs

What are lower lows in crypto?

Lower lows happen when each new price dip is lower than the last, signaling increased bearish pressure and confirming a downtrend.

What do lower lows indicate?

They suggest sellers are in control and buyers are unable to hold support, often leading to continued downward movement.

How do lower lows relate to lower highs?

Together, lower highs and lower lows form a bearish price structure, commonly seen in downtrends.

Can I trade using lower lows?

Yes. Traders use them to confirm short entries or avoid long setups. Some wait for confirmation with RSI or MACD before entering.

Are lower lows reliable on all timeframes?

Yes. They appear on intraday charts like 5-minute as well as daily or weekly charts. Longer timeframes carry more weight.

How can RSI help when analyzing lower lows?

If RSI forms a higher low while price forms a lower low, this may signal bullish divergence and potential for a trend reversal.

Do lower lows always lead to more downside?

Not always. False breakdowns can occur, especially in oversold markets. Always wait for confirmation and consider market context.

What patterns include lower lows?

Descending triangles, falling channels, and bear flags all include lower lows as part of their structure.

Can Phalerta detect lower lows?

Yes. You can set up alerts in Phalerta to be notified when price breaks below previous lows, indicating the formation of a new lower low.

What’s the difference between a pullback and a lower low?

A pullback is a temporary move against the trend. A lower low signals trend continuation and forms part of a broader bearish structure.

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