Top Technical Analyst Claims Latest Bitcoin Engulfing Candle Isn’t Bullish

Tony "The Bull" Severino

5 years ago

2 mins read

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Last night’s Bitcoin monthly April candle closed as a bullish engulfing, often considered a reversal candle by traders and analysts.

Bulls must beware, however, as one of the most respected top technical analysts recommends not trading this setup when the primary trend is down, as more often than not it leads to another devastating crash.

Bitcoin April Monthly Closes As Bullish Engulfing

In March, a day now dubbed Black Thursday caused Bitcoin to erase nearly all gains over the last year and a half of price action.

The record-breaking collapse took the first-ever cryptocurrency to below $3,800.

But this week, Bitcoin price rocketed to over $9,500 in a dramatic push from extreme lows. The rally continued through the monthly close, causing the leading crypto asset by market cap to form a bullish engulfing candle on the monthly timeframe.

The highest timeframes are the most effective signals, typically, so the crypto market is rightfully feeling bullish once again, especially with Bitcoin’s halving less than two weeks away.

Google Trends are already skyrocketing alongside the price of the crypto asset, potentially signaling the start of another bull market. But one expert focusing on chart patterns warns that the signal isn’t worth trading.

Not So Fast, Says Thomas Bulkowski, Chart Pattern and Technical Analysis Expert

Thomas Bulkowski is a world-renowned technical analysis who has released a number of books on chart patterns and has completed extensive statistical research across thousands of charts to find out the success rate of certain signals.

He has put together metrics on how far prices move after patterns confirm, how far the price will throwback to test support, and much more.

If anyone can speak with authority on which patterns are worth trading, it’s Bulkowksi. He’s even penned full encyclopedias on the subject.

On his website, called The Pattern Site, Bulkowksi explains that a bullish engulfing candle acts as a reversal 63% of the time. At first glance, that sounds incredibly bullish.

And while it is in the short term, Bulkowksi warns that when the primary trend is down, bullish engulfing candles are very short-lived, and are often followed by another drop.

The same thing happened in the past in June 2018. Next, a three black crows pattern completed, and the deadly November 2018 drop occurred that took Bitcoin price to its bottom around $3,200.

Is this latest bullish engulfing candle in Bitcoin yet another fake-out that leads to further downside and a continuation of the downtrend? Only time will tell, but for now, the bullish momentum will continue as crypto traders anticipate a reversal with the halving.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.