A lower low is when the price of a cryptocurrency closes lower than the previous day, which itself closed at a low.
A lower low is when the price of a cryptocurrency closes lower than the previous day, which itself closed at a low. For example, a cryptocurrency may close with a 2% loss on one day and a 3% loss on the next day. This would be considered a lower low since one losing day is followed by another losing day. A lower low can be indicative of a falling trend and gives traders a reason to enter selling positions.
If, on the other hand, a lower low in prices is accompanied by lower lows on technical indicators, this can be considered a bearish sign.
A lower low can be traded in different ways, depending on the underlying trend.
If the price is in an uptrend, a lower low could indicate the end of the uptrend. In that case, traders would consider going short if another move confirms the bearish indicator. Depending on a trader's risk preference, they may want to enter the position immediately or wait for a bearish confirmation.
Furthermore, they adjust their trading strategy according to non-technical factors like macroeconomic news or token-specific information.
Generally, a lower low is considered to be fairly simple to trade since it gives traders a good opportunity to invalidate their bearish thesis if the price does not confirm the downtrend or the break of an uptrend.
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