Often Cryptocurrency traders look at the candlestick patterns to determine whether a market is bullish or not. They are visually appealing and easy to understand. They are called candlesticks because they are shaped like a rectangle with long lines similar to a wick on either end. They show how the market has reacted to a crypto, and when you study them over time, you can see patterns that show whether or not it is a bullish market. Take a look at the following five bullish candlestick patterns.
1. Bullish Engulfing Candlestick
The bullish engulfing candle appears when you have a candle one day followed by a candle that completely overlaps it the following day. This is a signal that new buyers have entered the market and are likely to continue driving the price up. The crypto must open at a lower price on day 2 than it closed on day 1 so that it can engulf it. If the crypto ends up with a higher close than it did the previous day, it is a bullish engulfing candle. The bears may have opened the day, but the bulls took over and drove the crypto up.
2. Rising Three Methods Candlestick
The rising three methods pattern shows that there was some bearish activity, but the bulls are regaining control of the crypto. You will see the first bar with a large body within an upward trend. The next three candlesticks are small bearish ones, and they are above the low of the previous, but below the high. The last candlestick is another bullish candlestick with a large body that closes above the high of the first candlestick. This shows the bulls are back in control.
3. Three White Soldiers Candlestick
This pattern follows a downward trend of a crypto, and it predicts a reversal to a bullish market. After a period of downward action, three long bodied candlesticks will tick upward. Each one opens within the previous day’s real body and closes higher. This pattern suggests a positive change in market sentiment toward the crypto.
4. Piercing Line Candlestick
The piercing line pattern is a two-day pattern that shows a potential reversal of a downward trend. The first candlestick follows a downward trend in prices, and the second day begins lower than the first. However, the second day closes above the midway point of the first day, which shows a potential upward trend. This shows that the bulls want to buy the crypto at this price point.
5. Bullish Hammer Candlestick
This pattern shows a small candle body with a long tail. There is a downward trend leading to this day. It shows that buyers came into the market and absorbed the losses by the sellers. The buyers push the price back near the open. The lower tail should be twice the length of the body, and this indicates a potential upward trend. As long as there is confirmation with the following day’s candle showing an upward trend, it is a bullish hammer.