Piercing Line Candlestick and Dark Cloud Cover Candlestick
Piercing Line Candlestick and a Dark Cloud Cover Candlestick both look alike but the difference is that one occurs at the top of a Bitcoin price uptrend (Cloud Cover) and the other occurs at the bottom of a downwards Bitcoin price trend (Piercing Line).
Upward Trend Reversal - Dark Cloud Cover CandlesticksDownward Trend Reversal - Piercing Line Candles
Piercing Line Candlestick
Piercing line candle is a long black body followed by a long white body candlestick.
White body pierces the mid point of the prior black body.
This piercing line candlestick pattern is a bullish reversal pattern that occurs at the bottom of a market downtrend. It shows that the market price opens lower and closes above the midpoint of the black body candlestick.
This candle pattern shows that the momentum of the downtrend is reducing and the current market trend is likely to reverse and move in an upwards direction.
This piercing line candlestick pattern is shown as a piercing line signifying the market is piercing the bottom therefore representing a market floor for the Bitcoin price downwards trend.
Piercing Line Candle Pattern - Bitcoin Trading
Technical Analysis Piercing Line Candlestick
A buy trading signal generated using the piercing line candlestick pattern is confirmed once the price of Bitcoin closes above the neckline which is the opening of the candlestick on the left of the Piercing Line candlestick as shown on the example above.
This is a bullish setup and Bitcoin price should continue moving upwards and for a trader who open a buy trade using this setup should put a stop loss just below the lowest price level.
Dark Cloud Cover Candlestick
Dark cloud cover candlestick is the opposite of piercing line candlestick - this candlestick pattern occurs at the top of an upward trend.
Dark cloud cover candlestick is a long white body followed by a long black body.
Black body pierces the mid point of the prior white body.
Dark cloud cover candlestick is a bearish reversal candlestick pattern that occurs at the top of an upwards trend.
It shows that the market opens higher & closes below the midpoint of the white body.
Dark cloud cover candlestick pattern shows that the momentum of the uptrend is reducing and the market trend is likely to reverse & move in a downwards direction.
This candle pattern is shown below and is known as a dark cloud cover signifying the cloud as a ceiling for the Bitcoin price upward trend.
Dark Cloud Cover Candle Pattern - Bitcoin Trading
Technical Analysis of Dark Cloud Cover Candlestick
A sell signal generated using this dark cloud cover candlestick pattern is confirmed once price closes below the neckline which is the opening of the candlestick on the left of this candlestick as shown above.
This candle pattern is a bearish setup and Bitcoin price should continue moving downwards and for a trader who open a sell trade they should place a stop loss just above the highest price level.
