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Piercing Line Candlestick & Dark Cloud Candle

Piercing Line Candlestick and a Dark Cloud Candlestick both look similar but the difference is that one +occursforms at the top of a Bitcoin price upward trend (Cloud Cover) and the other forms at the bottom of a downwards Bitcoin price trend (Piercing Line).

Uptrend Reversal with Dark Cloud Cover CandlesDownwards Trend Reversal - Piercing Line Candles

Piercing Line Candle

Piercing line candlestick is a long black body which is then followed by long white body candle.

A white shape moves past the center of the black shape before it.

This piercing line is a bullish reversal pattern at the end of a downtrend. Price opens low and closes above the middle of the prior red candle's body.

The trend goes up, so buy only after a pullback. As a buyer, wait for the setup post-retracement to enter again.

This depiction of the piercing line candlestick formation suggests that the market is breaking through the lower boundary, thereby establishing a floor for the downward trajectory of the Bitcoin price.

Piercing Line Pattern in Bitcoin Candles - Dark Cloud Cover Bitcoin Setup

Piercing Line Candlestick Pattern - Bitcoin Trading

Analysis Piercing Line Candle

A buy signal using the Piercing Line candlestick pattern is confirmed once Bitcoin's closing price exceeds the neckline - the opening price of the candlestick situated to the left of the Piercing Line pattern. Refer to the provided example for further clarification.

This setup looks bullish. Bitcoin price should keep rising. A trader opening a buy trade here should set a stop loss just below the lowest price.

Dark Cloud Candle

Dark cloud cover candle flips against the piercing line one. It forms at the peak of a rise.

Dark cloud cover candlestick is a long white body which is followed by a long black body.

Black candle crosses the middle of the previous white one.

The dark cloud cover candlestick pattern is classified as a bearish market reversal pattern that manifests at the peak of an uptrend.

This observation signifies that the market opened at a higher level than its intraday midpoint and closed beneath it, relative to the white body's center.

The dark cloud cover candlestick pattern indicates a weakening uptrend and signals a potential reversal into a downward trend.

This candle pattern is pictured below and is called a dark cloud cover, with the cloud representing the highest price bitcoin can reach in its uptrend.

Piercing Line Pattern on BTC - Dark Cloud Cover in Bitcoin Candles

Dark Cloud Candle Pattern - Bitcoin Trading

Analysis of Dark Cloud Candle

A sell signal generated via the dark cloud cover candlestick pattern is confirmed once the price closes below the neckline. The neckline corresponds to the opening price of the candlestick immediately left of this formation.

This specific candlestick formation indicates a downward trend, suggesting that the price of Bitcoin is expected to continue falling: consequently, a trader holding a short position should place a protective stop just above the pattern's highest attained price.

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