Watch out! HUGE Bitcoin Evening Star Doji Setup on The Weekly!
Here on the weekly chart, we can see that price has printed half of an enormous evening star doji pattern, and it's a textbook formation thus far. Since the beginning of February, price has been in an uptrend (pink channel) on the weekly chart. However, we printed a huge bullish candle after we exploded above the weekly 200 EMA (in purple.) Price hit a ceiling though, right at the weekly 50 EMA (in orange.) As you can see, the current candle is in the form of a doji star. So, I think this weekly candle will close tomorrow evening, and we will begin the next weekly candle. Therefore, if we close this candle in the form of a doji star, it will have halfway completed a textbook evening star pattern on the weekly time-frame.
Many of you are probably wondering what that means. Well, an evening star is a bearish reversal formation. Typically, the bullish candle that rises before the doji star, is completely erased on the other side of the doji. In other words, if this pattern plays out, next week could completely erase the gains that we have seen, since the breakout above the weekly 200 EMA. I've shown in other analyses how we were just rejected at the top of a huge uptrend channel, and I've shown how we could return to the bottom of that channel. For clarification, see the previous BTC analysis linked below. This pattern is suggesting that we could see a fall to the bottom of that channel, and potentially even lower.
As I have featured in other analyses, you can see that there is a big nasty red arrow on the chart, showing how BTC could wipe out an enormous amount of value next week. That's because for this pattern to complete itself, we would have to see a powerful bearish follow through on the reversal. Keep in mind, this pattern is NOT complete. However, it is set up perfectly to fulfill itself. The exciting part, is that if we do see an explosive retracement back to the 200 EMA (in purple) next week, that might not be the end of the selling. In fact, evening stars often produce several candles of downside continuation on the back of the pattern. So, we will have to see how this plays out. I just wanted to bring it to everyone's attention, so that you all understand the potential downside risk.
The weekly 50 EMA has stopped BTC dead in it's tracks. From this point, the most likely direction we will traverse, is to the downside in the coming weeks.
To anyone out there who is a candlestick pattern junkie, wondering how this is a "textbook" evening star setup, without a gap up to the doji, I only have one thing to say — this is Bitcoin. It's a 24 hour market. There isn't a single gap on this chart. As a result, I have excluded that textbook requirement.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Many of you are probably wondering what that means. Well, an evening star is a bearish reversal formation. Typically, the bullish candle that rises before the doji star, is completely erased on the other side of the doji. In other words, if this pattern plays out, next week could completely erase the gains that we have seen, since the breakout above the weekly 200 EMA. I've shown in other analyses how we were just rejected at the top of a huge uptrend channel, and I've shown how we could return to the bottom of that channel. For clarification, see the previous BTC analysis linked below. This pattern is suggesting that we could see a fall to the bottom of that channel, and potentially even lower.
As I have featured in other analyses, you can see that there is a big nasty red arrow on the chart, showing how BTC could wipe out an enormous amount of value next week. That's because for this pattern to complete itself, we would have to see a powerful bearish follow through on the reversal. Keep in mind, this pattern is NOT complete. However, it is set up perfectly to fulfill itself. The exciting part, is that if we do see an explosive retracement back to the 200 EMA (in purple) next week, that might not be the end of the selling. In fact, evening stars often produce several candles of downside continuation on the back of the pattern. So, we will have to see how this plays out. I just wanted to bring it to everyone's attention, so that you all understand the potential downside risk.
The weekly 50 EMA has stopped BTC dead in it's tracks. From this point, the most likely direction we will traverse, is to the downside in the coming weeks.
To anyone out there who is a candlestick pattern junkie, wondering how this is a "textbook" evening star setup, without a gap up to the doji, I only have one thing to say — this is Bitcoin. It's a 24 hour market. There isn't a single gap on this chart. As a result, I have excluded that textbook requirement.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
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