One candle alone could reveal the end of the decline! Learn about the inverted hammer.
Lesson Three: Hammer Candle — Beginning of the Bullish Reversal
The hammer candle is one of the most famous reversal candles, usually appearing at the end of a downtrend, and is considered an early signal of a potential upcoming rise.
✅ Hammer candle shape:
Small body (green or red).
Very long lower shadow (2 to 3 times the body length).
Short or nonexistent upper shadow.
Often appears after a series of bearish candles.
📌 Mental image: resembles a real hammer, with a small head and a long handle.
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📈 What does the hammer candle mean?
The price was in a downward trend.
Sellers pushed the price down, but in the same session, buyers returned strongly and closed the price near the opening.
This movement indicates that buyers have begun to take control, and the decline may have ended.
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❗Does every hammer mean a confirmed rise?
No. The presence of a hammer candle alone is not enough; rather:
It must appear after a clear downtrend.
It is preferable that it is followed by a green candle to confirm the rise (Confirmation candle).
Additional support from indicators like RSI or strong support areas = stronger signal.
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Apply this model to $BTC and you'll be amazed by the result.