Why is the hanging man candlestick pattern considered bearish in the context of cryptocurrency trading?

1 answers

• Saed NajafiMay 08, 2024 · a year ago
  In the context of cryptocurrency trading, the hanging man candlestick pattern is considered bearish because it often indicates a potential reversal in an uptrend. This pattern forms when the price opens significantly higher than the previous close, but then falls during the trading session and closes near the low point. The long lower shadow of the hanging man pattern represents the sellers' attempt to push the price down, but the buyers manage to prevent a significant decline. However, the fact that the price closed near the low point suggests that the sellers are gaining strength and a potential downward trend may follow. Traders often use the hanging man pattern as a signal to consider selling or taking profits, as it indicates a potential shift in market sentiment from bullish to bearish.
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