Bullish Engulfing
A bullish engulfing is a two-candle reversal pattern where a small red candle is followed by a larger green candle that completely "engulfs" the previous candle's body. It signals buyers overwhelming sellers.
Understanding the Concept
This pattern works best at support levels or after downtrends. The first candle shows continued selling, but the second candle flips the script—buyers step in with force and erase all the selling pressure. The bigger the engulfing candle, the stronger the signal. Volume confirmation matters: if the green candle has higher volume than the red, that's real buying pressure. It's not a magic pattern, but combined with key levels, it's a solid entry trigger.
Real-World Example
Bitcoin drops to $30,000 support. Day 1: small red candle closes at $30,200. Day 2: large green candle opens at $30,100 and closes at $31,500, completely engulfing the previous day. That's your buy signal.
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