What is Channel (Technical Formation)?

A channel is a charting pattern in technical analysis (TA) that is classified as an area where an asset is trading between two price trendlines (an upper and lower trendline). Channels generally form when an asset's price stays between a resistance level that it won't break above, and a support level it won't drop below. There are several types of channels that can form, including ascending channels and descending channels. Channels can be used by traders, in combination with several other TA metrics, to initiate opportunities to buy and sell an asset at certain price levels.