#MarketTurbulence In the world of crypto, when we talk about a candle with a tail (or long tail), we are referring to a candlestick on the chart that has a relatively long "tail" compared to the candle's body. To understand this more precisely, let's explain the elements of a Japanese candlestick:
Body: Represents the price difference between the opening and closing prices during the candle's time period.
Wick/Shadow: Represents the highest and lowest prices reached during the same time period.
The Meaning of a Long Tail
A long lower wick: Means that the price fell significantly during the period but rebounded before closing. This is often interpreted as strong buying pressure or that buyers entered the market aggressively at low levels.
A long upper wick: Means that the price rose significantly during the period but declined before closing. This is often interpreted as strong selling pressure or that sellers controlled the market at high levels.
Trading Context
A long tail in a downtrend: May indicate a potential upward reversal if there is a long lower tail.
A long tail in an uptrend: May indicate a potential downward reversal if there is a long upper tail.
Simply put, a long tail is an indication of price rejection at a certain level or strong pressure from buyers or sellers.
