Bearish 3 Outside Down Reversal Cryptocurrency Chart Pattern.

Crypto Candlestick Chart Pattern Recognition: Bearish 3 Outside Down Reversal pattern

By analyzing the most recent OHLCV price movements of the last days. Daily updated!

Bearish Three Outside Down Candlestick Pattern

The Bearish Three Outside Down is a candlestick pattern that signals a potential reversal in an ongoing uptrend, indicating that the bears have taken control and that the price might continue to move downward. This pattern is considered a strong bearish reversal signal, especially when it appears after a significant uptrend and in a context where other technical indicators support the reversal.

Formation of the Bearish Three Outside Down Pattern:

• The pattern begins with a bullish candle, suggesting that the buyers are still in control.
• The second day sees a bearish reversal, with the candle opening above the close of the previous day’s bullish candle and closing below its open, engulfing it completely. This indicates that sellers have entered the market and are starting to take control.
• The third candle is also bearish, opening within the body of the second candle and closing below its low, confirming the bearish reversal and suggesting that the sellers are dominating the market.

The Bearish Three Outside Down function recognizes this pattern by checking the following conditions:

• The first candle is bullish.
• The second candle opens above the first candle’s close and closes below its open, forming a bearish engulfing pattern.
• The third candle is bearish and its body is contained within the range of the second candle’s body, and it closes lower than the second candle, confirming the bearish sentiment.

Traders often view the Bearish Three Outside Down pattern as a reliable indication of a potential downward trend. However, it is crucial to consider other technical indicators and the broader market context to validate this bearish reversal signal and formulate an effective trading strategy.