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The Measured Move Down is a bearish continuation pattern consisting of an initial decline (first leg), a corrective bounce, and a second decline (second leg) approximately equal in length to the first.
This is the bearish ABC move — one of the most reliable ways to project downside targets. When the first leg of a selloff is defined, you can estimate where the second leg will end.
The pattern reflects how fear works in waves. Panic, relief, then panic again — with each wave often covering similar ground.
The first leg is the initial shock. Whether triggered by news, earnings, or technical breakdown, the selling is sharp and decisive.
The corrective bounce gives trapped holders false hope. Short sellers take profits, and dip-buyers step in. But the rally is weak — it's a dead cat bounce within a measured decline.
The second leg resumes as the bounce fails. Dip-buyers become forced sellers, adding fuel to the decline. The measured symmetry appears because the same selling pressure and fear dynamics that drove leg one replicate in leg two.
Short at the bounce high when reversal signals appear. Project the first leg's length downward from the bounce high.
Above the bounce high. If price exceeds this, the measured move is invalidated.
Measure the first leg's length (high to low) and subtract it from the bounce high. This is your measured move target.
Entering at the 50% bounce typically gives 1:2 to 1:3.
Measured moves down are essential for setting short targets and identifying where declines might find support.
In crypto crashes, measured moves down are your best friend for setting buy orders. Measure leg one, project from the bounce, and place bids at the target.
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