Downtrend is a state of the market where the price continuously declines step by step.
Simply put,
when—
every time the price creates a peak lower than the previous peak (High)
and creates a bottom lower than the previous bottom (Low)
it is called a downtrend.
Characteristics of downtrend
📉 Lower High
📉 Lower Low
Sellers are more powerful
The trendline on the chart slopes downwards from above
Example
If the price decreases as follows:
100 → 90 → 80 → 70
and every time it rises in between, it rises less than before—then this is a downtrend.
In trading
Selling or short trading is generally safer in a downtrend
Buying is risky for new traders
If support is broken, the price may drop further.