FireHoseReel | Engulfing Candlestick Pattern (Crypto Version)🔥 Welcome FireHoseReel !
Let’s dive into the Engulfing Candlestick Pattern.
✔️ Bearish Engulfing – Basics
The Bearish Engulfing is a two-candlestick reversal pattern.
The first candle is bullish, and the second is a larger bearish candle that fully engulfs the first candle’s body and closes below its low.
Since crypto rarely has gaps, the key condition is that the second body completely covers the first body.
Shadows are not significant.
This pattern is most reliable after a weakening uptrend.
🎯 Bearish Engulfing – Psychology
This pattern shows a strong bearish shift.
Buyers push price upward at first, but the second candle proves sellers have taken full control, dragging price down and even breaking the previous candle’s low.
It signals momentum shifting from bulls to bears.
🧮 Bearish Engulfing – Setup & Levels
• Trigger: Break below the low of the second candle.
• Confirmation: A close below the trigger.
• Stoploss: Above the high of the second candle or whole structure.
• Buy-stop entry: Only if the main trend remains strongly bullish (rare in crypto).
✔️ Bullish Engulfing – Basics
The Bullish Engulfing is a two-candlestick reversal.
The first candle is bearish, and the second is a larger bullish candle that fully engulfs the first body and closes above its high.
In crypto, the key factor is that the second bullish body fully covers the first bearish body.
It works best after a downtrend or capitulation phase.
🎯 Bullish Engulfing – Psychology
This pattern indicates a strong bullish reversal.
Sellers control the first candle, but buyers return aggressively on the second candle, overpowering them and closing above the previous high.
It signals momentum shifting from bears to bulls.
🧮 Bullish Engulfing – Setup & Levels
• Trigger: Break above the high of the second candle.
• Confirmation: A close above the trigger.
• Stoploss: Below the low of the second candle or structure.
• Sell-stop entry: Only in strong downtrends and rarely recommended.
🛞 Risk Management & Disclaimer
Please remember to always use proper risk management and position sizing. Nothing in this analysis is financial advice. The market can change quickly, so always trade based on your own strategy, research, and risk tolerance. You are fully responsible for your own trades.
