Bearish Chart Patterns

After the big crash yesterday, it seems the crypto market is turning bullish today. Now, as crypto trader and if you don't to get rekt, there are some chart patterns that you could take note of so you will know how to stop your trade in a bearish markets and prevent your loss. Here the 5 most common bearish pattern in the charts.

Evening Star Trading Pattern

While this is not a trading trend in and of itself, it can be a useful predictor for determining when it is a good time to enter or leave a market place. In a candlestick map, this pattern is created when one big green candle is accompanied by a small red candle that does not touch the real body of the first candle. After that, the third candle would be a green candle with a wide body, identical to the first. This pattern can be a good indicator of when it's a good time to sell or exit a spot.

Hanging Man Crypto Trading Pattern

This candlestick pattern is also very relevant for traders in the crypto market right now. In reality, this pattern exists. This may also refer to bullish periods where a bear market is approaching an inflexion stage. Three candles are used to reflect this pattern. The first is an optimistic candle with a medium to broad green body, accompanied by a red candle with a small body and long shadow. This emerges at the top of a wave and indicates that the trend has shifted from bullish to bearish.

Hammer Candlestick

This follows the same trend as the previous one. As in a typical chart, there will be three candles in this case. A candle will be placed between two others, casting a long shadow and a small body in the lower portion. In general, it's critical to comprehend why this occurred when considering the volume of activity in this formation. The greater the value, the more likely the market would reach an inflexion stage.

Head and Shoulders

In the cryptocurrency industry, this is one of the most well-known trading trends. The market is shifting from bullish to bearish in this trend. It has three bullish momentum with two valleys in the centre, which is one of its key characteristics. Since there is a significant bullish movement between two minor bullish "armpits," it is known as Head and Shoulders or H&S. The “head” of the pattern can be seen in this big bullish trend. When the pattern is full, you can exit the market with confidence that the trend will most likely continue downwards. This could turn out to be a very lucrative trend as buyers step away and sellers raise their pressure.

Double / Tripple Tops

If you see the market is that and the charts show it is difficult to break through a resistance level, you should be cautious. Three or two tops could be interpreted as a bearish warning, as bullish traders are unable to break through the sellers' barrier at this price point. If the market reaches this stage, the safest thing to do is to still have a strategy. It is important to note that this does not guarantee that the market will turn bearish, but it is still important to consider.

Final Words

The above are some of the most bearish trends in the cryptocurrency market, as well as how they can influence how you trade virtual currencies. While not all of them would indicate that the market is turning bearish, it is always important to consider them while planning our strategies. These trends can be useful in determining when to enter or exit the market.

Image sourge: investopedia.com