Bitcoin Daily Close Shows Bulls Are Losing Control: Long-Legged Doji Explained

Tony "The Bull" Severino

5 years ago

2 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Last night, Bitcoin price closed the daily trading session with a long-legged doji. This type of Japanese candlestick often signals indecision and a lack of determination from bulls.

In the past, each time this signal appeared, a deep correction followed. With bulls potentially losing control once again, bears could take over and push Bitcoin price back down to test support below.

Bitcoin Price Daily Closes With Long-Legged Doji: What Does This Mean?

After closing the April 2020 monthly candle above $8,500, the leading cryptocurrency by market cap has been trading above that key level for six weeks and counting.

From the Black Thursday bottom up to current levels, bulls were able to rally over 150% in under three months, with no more than a 20% correction along the way up.

But now that bulls have pushed the price per BTC back up to the asset’s most important and strongest resistance yet, buyers are beginning to lose control, according to the latest daily candle close.

According to the study of Japanese candlesticks, depending on the way an asset’s trading session closes, along with the height of the candlestick body and its shadows – also called wicks – it can tip traders off as to what to expect in the following trading sessions.

In this case, Bitcoin price last night closed the daily with a long-legged doji, showing not only indecision in the market, but that bulls may lack the determination required to breach this powerful resistance that has held the crypto asset back for nearly two years now.

Long-Legged Doji Shows Bulls Are Losing Their Kick, Bears May Regain Control

A long-legged doji appearing after last night’s Bitcoin price daily candle close doesn’t bode well for bullish crypto traders.

According to Investopedia, long-legged doji are most significant when they appear at the top of an uptrend. There, they signal that after a strong advance, buyers are running out of steam, and a reversal could play out soon.

Looking back over the last year of top formation in BTCUSD price action, the leading cryptocurrency by market cap closed at least one long-legged doji during each top before plummeting to a new low.

One of these Japanese candlestick formations marked the top of the August 2019 rally. More appeared twice in September ahead of the post-Bakkt crash, along with another pair before and after the China pump. There was yet another before the historic Black Thursday market selloff.

Now, the cryptocurrency has painted a long-legged doji once again.

Is this time different, or is this long-legged doji a warning sign that bears are about to take back control over cryptocurrencies, and caused another massive crash in Bitcoin?

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.