A Bear Flag pattern is a technical analysis chart pattern that signals the continuation of a downtrend in a financial market, such as stocks, commodities, or cryptocurrencies. It is part of the broader category of flag patterns, which are used by traders to identify potential price movements based on historical data.

The Bear Flag pattern consists of two main components: the flagpole and the flag. The flagpole represents a sharp decline in price, typically occurring over a short period. This steep drop is followed by a consolidation phase, where the price moves in a small, upward-sloping channel or rectangle, forming the flag. This consolidation phase is usually marked by lower trading volume, indicating a temporary pause in selling pressure.

The Bear Flag pattern is confirmed when the price breaks below the lower trendline of the flag with increased volume, suggesting that the downtrend will continue. Traders often use this pattern to enter short positions, aiming to profit from the expected continuation of the bearish trend.

This pattern is considered reliable when it forms after a significant downtrend and the consolidation phase is brief, lasting anywhere from a few days to a few weeks. By recognizing the Bear Flag pattern, traders can better anticipate market movements and make more informed trading decisions.