It is therefore a formation that indicates that there is a high possibility that the market changes its bullish trend to a bearish trend. It is also used as a long term chart patterm like the Rounding Bottom as it usually has a duration of about three months. During the formation of the figure, the volume is more erratic than in the regular Rounding Bottom, however, the volume increases significantly when the prices are falling due to panic in the markets (almost in free fall). This chart pattern can be classified as a distribution figure.
The Inverted Rounding Bottom is a figure which consists of a chart pattern that is very similar to the regular Rounding Bottom but in opposite sense as it appears in bullish markets as a trend change formation.