📊 The Evening Star Pattern: Signal of a Change in Bullish Trend

What is the Evening Star?

The Evening Star is a reversal technical pattern formed by three candlesticks that appears at the end of an uptrend. This pattern is the bearish equivalent of the Morning Star and is characterized by a specific structure: a large bullish candle (green), followed by a small candle (known as a doji or spinning top) that shows market indecision, and finally a large bearish candle (red).

Technical Features of the Pattern

To correctly identify a Sunset Star, it is necessary to observe certain specific technical elements:

1. First candle: It should be bullish with a significant body, confirming the previous bullish trend.
2. Second candle: Shows indecision with a small body and may present a bullish gap compared to the first candle.
3. Third candle: A bearish candle that ideally opens with a gap down and closes below the midpoint of the first candle.

The reliability of the pattern increases when the third candle completely eliminates the gains generated by the first, significantly penetrating its body.

Implications in the Crypto Market

This pattern indicates a probable reversal of the bullish trend and is often an important signal for cryptocurrency traders. Its relevance increases when it appears in resistance zones or after prolonged upward movements. The confirmation of the pattern occurs when the price continues its downward movement after the complete formation, especially if accompanied by an increase in volume during the third candle.

In the cryptocurrency market, this type of technical formations requires additional validation through other indicators such as the RSI or trading volume to maximize its effectiveness in trading decision-making.