Bitcoin Traders Tips for Reading and Interpreting Candlestick PatternsScroll Down
There are some patterns that bearish Bitcoin traders need to know. In order to be valid, the second candle as to be in the range of the first candle. This pattern is called the Harami Cross. Harami is the Japanese word for pregnant. In this pattern, the green candlestick is the mother, and the small candlestick is the baby.
Prices around this pattern are often called "dark cloud cover." It is a two-candle pattern that signifies a bearish reversal at the end of a bull move. The first candle is big and green, and it is followed by a red candle. The second candle makes a gap with a higher price. This shows that bears are dominating the trading session and pushing the price lower.
The Evening Star is another bear pattern. It looks like an upward trend with a big bull candle, then it is followed by a small candle and a gap to a red candle. The gap closes by noon on the first day. The first evening candle as to be green and a large body. The second one has a short body and makes a gap. The red candle after this closes the gap.
In a legacy market, gaps are between the candles. Some analysts think the pattern could be valid without gaps. A shooting star is a bear reversal pattern. It starts with green then green or red with a tall top and small body. The second candle has a fat bottom and slim body.
A long wick indicates that bulls controlled trading before the bears quickly took over at the end of a session. A hanging man is a single-candle pattern suggesting a price reversal to bearish figures. It has a long, low shadow and small body. The hanging man is identified when it is at the bottom of a downward trend. In this case, it is called a hammer and suggests a bull reversal. It shows sellers took control and reports that bears had to defend the current price. The hanging man shows sellers will continue selling until they reach the next candle.