What are Three Black Crows Candlestick Patterns in Crypto?

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Have you ever heard of the "Three Black Crows"? No, it's not a sinister omen from a dark fairy tale, but rather a fascinating bearish candlestick pattern that could signal a reversal of an ongoing uptrend in the stock market. Picture this: three consecutive long-bodied candlesticks, all opening within the body of the previous one and closing lower. Quite the intriguing sight, right?

<source: cdn.howtotradeblog>

Now, savvy traders don't rely solely on this mysterious pattern. They often combine it with other technical indicators like the relative strength index (RSI) to get a more accurate prediction. The size of the three black crows and their shadows can also give some insight into whether the reversal might face a retracement, so it's essential to keep an eye on those details.

And, as with any good story, there's an opposite to the three black crows: the three white soldiers. This pattern signals a possible reversal of a downtrend, bringing balance to the world of candlestick charts. So, next time you're analyzing the stock market, remember to watch out for the three black crows and their counterparts, the three white soldiers!

How to spot the Three Black Crows

You know what's interesting about the "Three Black Crows"? It's a purely visual pattern in the world of stock trading, so you don't have to worry about any complex calculations!

<source: elearnmarkets>

Picture this: for three days straight, the bears (the pessimistic traders) dominate the bulls (the optimistic ones). And how do we see this on the pricing charts? Well, it appears as three long-bodied, bearish candlesticks with barely any shadows or wicks.

Imagine the scene: the day starts with the bulls pushing the price slightly higher than yesterday's close, but the bears quickly take over, driving the price down throughout the session. By the end of the day, the price is near its lowest point, thanks to the relentless bearish pressure.

These three days of downward movement create very short or even nonexistent shadows, and traders often see this as the beginning of a bearish downtrend. So, if you ever spot the elusive Three Black Crows, you might want to brace yourself for a potential turn of events in the market!

Mastering the Art of Using the Three Black Crows

So, you've spotted the mysterious "Three Black Crows" on the chart, but what now? Well, the best approach is to see them as a clue and look for confirmation from other technical indicators. After all, how much faith you should place in this pattern depends on its formation.

Ideally, the three black crows will be long-bodied bearish candlesticks closing near the low price for the period, with short or nonexistent shadows. But watch out! If the shadows start to stretch, it could just be a brief tussle between the bulls and bears before the uptrend comes back in full force.

Now, here's a little secret: volume can make the three black crows pattern more reliable. If the uptrend before the pattern had low volume, and the three-day black crow pattern itself had high volume during the sessions, you might be onto something! It could mean that a small group of optimistic bulls established the uptrend, only to be overthrown by a more significant group of pessimistic bears.

But, as with all things in the market, there's a twist: it could also be a large number of small bullish traders meeting a smaller group of large volume bearish traders. In the end, the number of traders isn't as important as the volume they bring to the table. So, when you encounter the enigmatic Three Black Crows, remember to keep an eye on those other factors to make the best trading decisions!

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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.