Bearish Engulfing Reversal Cryptocurrency Chart Pattern.

Crypto Candlestick Chart Pattern Recognition: Bearish Engulfing Reversal pattern

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

Bearish Engulfing Candlestick Pattern

The Bearish Engulfing pattern is a powerful two-candlestick pattern that occurs during an uptrend, signaling a potential reversal to the downside. It consists of a small bullish candle followed by a larger bearish candle that "engulfs" the entire body of the first candle. This pattern reflects a shift in momentum, where sellers have overcome the buyers, indicating that a bearish reversal may be on the horizon.

Formation of the Bearish Engulfing Pattern:

1. First Day: The first candle is a small bullish candle that is formed during an uptrend. It shows that buyers are still in control, pushing the price higher.
2. Second Day: The second candle is a large bearish candle. It opens above the close of the first candle and closes below its open, effectively "engulfing" the entire body of the first candle. This indicates that sellers have entered the market with force and taken control.

The Bearish Engulfing function in our code identifies this pattern by checking the following conditions:

• The first day features an up candle, denoting a continuation of the prevailing uptrend.
• The second day is marked by a down candle, which signifies the entrance of sellers.
• The opening price of the second day is higher than the closing price of the first day, and the closing price of the second day is lower than the opening price of the first day, confirming the engulfing pattern.

This pattern is a strong indication of a potential reversal from a bullish to a bearish trend. However, traders should seek additional confirmation through other technical indicators and analyses before making any trading decisions to increase the reliability of the signal. As always, it's essential to consider the broader market context and utilize proper risk management techniques to mitigate potential losses.