Candlestick Patterns
Bearish
1. The Hammer
Bottom has a long lower wick, just like a hammer handle.
Body is often small, little or no upper wick
A Hammer signifies potential start of an uptrend
Image below shows that after a period of high selling pressure, a bottom was hit.
Immediately after, buyers began gaining momentum, hence the long lower wick.
Once the Hammer was formed, the trend was reversed, and prices began to increase.
A hammer can either be green or red.
Depending on the situation, it may indicate a prospective price increase (green) or a strong reversal trend
(red).
2. The Inverted Hammer
The only difference between the inverted Hammer has long wick directly above
the body instead of below.
An inverted Hammer can be green or red.
An Inverted Hammer signifies potential start of an uptrend
3. The Bullish Engulfing
Two candlesticks form this pattern at the end of a downtrend.
The first candlestick is red (bearish), while the second candlestick is green (bullish) and much larger than the
other one.
Simply put, the body of the second candle is large enough to fully engulf the previous candle.
In addition, there should be a small gap between the opening and closing price of both candles. In most cases,
these gaps are not often seen in cryptocurrency markets.
This pattern reveals that buying pressure has significantly increased and is overwhelming selling pressure.
Bullish
• Longer bottom Wicks on Green =more people started to buy
• More buyers = upward bullish momentum
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• Longer top Wicks on Red = more people started to sell
• More sellers = downward bearish momentum
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