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Home Cryptocurrency news

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

Tony Spilotro by Tony Spilotro
10 months ago
in Cryptocurrency news, Bitcoin, Technical analysis
Reading Time: 2min read
bitcoin bullish engulfing
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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.

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

Related Reading | Bitcoin Price Sets Longest Stretch of Positive Weekly Growth Since May 2017 

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.

bitcoin price bullish engulfing

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.

Related Reading | Sell Bitcoin in May and Go Away? Ominous June Event Could Cause Crash

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.

bitcoin price bullish engulfing

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.

Tags: bitcoinbtcusdbullish engulfingcryptothomas bulkowski
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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