Gravestone Doji
A Gravestone Doji is a candlestick pattern that often signals a potential bearish reversal, especially when it appears after an uptrend. It forms when the open, low, and close prices are all near the same level, but the high price extends significantly higher, creating a long upper shadow. This shows that buyers attempted to push the price up, but sellers regained control and forced it back down by the close.
The danger lies in the potential for a sharp sell-off if this pattern is confirmed by the next candle, particularly in volatile markets like crypto. Traders could experience significant losses if they ignore the rejection of higher prices indicated by the long upper shadow. This pattern is a clear warning to exercise caution, as it reflects market indecision that could quickly turn into downward momentum.
The danger lies in the potential for a sharp sell-off if this pattern is confirmed by the next candle, particularly in volatile markets like crypto. Traders could experience significant losses if they ignore the rejection of higher prices indicated by the long upper shadow. This pattern is a clear warning to exercise caution, as it reflects market indecision that could quickly turn into downward momentum.
"You hear the wind, but where does it go?"
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