To excel in trading in the cryptocurrency market, first learn how to read candlestick charts (Part II)
II. Bearish Candlestick Patterns
1. Hanging Man
The Hanging Man is similar to a Hammer but appears at the end of an uptrend, indicating that despite buyers pushing prices higher, a large sell-off suggests that market sentiment may soon turn bearish.
2. Shooting Star
The Shooting Star is a candlestick with a long upper shadow and a short body that is close to the bottom. It usually appears at the end of an uptrend, indicating that after the market reaches a peak, sellers dominate and push prices lower.
3. Three Black Crows
Three Black Crows consist of three consecutive red candlesticks, where the opening price is within the body range of the previous candlestick, and the closing price is lower than the lowest point of the previous candlestick, indicating that selling pressure continues to drive prices down.
4. Bearish Engulfing
The Bearish Engulfing consists of a longer green candlestick followed by a shorter red candlestick, where the red candlestick is completely within the body range of the green candlestick, indicating that buying pressure is weakening.
5. Dark Cloud Cover
The Dark Cloud Cover consists of a green candlestick followed by a red candlestick, where the opening price of the red candlestick is higher than the closing price of the previous green candlestick but the closing price is below the midpoint of the green candlestick, usually accompanied by high trading volume, indicating a shift from bullish to bearish.
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