Bearish Absorption is considered a strong signal of the weakness of the previously dominant bullish trend and the possible beginning of a downward movement. Traders use this pattern to make decisions about entering a short position, as it indicates that sellers in the market are getting stronger.
Bearish Takeover Strategies
Short Position: When a Bearish Takeover appears on the chart, traders may consider this as a signal to enter a short position. They can open a sale after closing a bearish takeover candle in order to profit from a future price decline.
Trend Confirmation: If a bearish trend is already present on the chart, the appearance of a Bearish Takeover can confirm its strength and indicate that sellers are increasing their pressure.
Combining with Indicators: Bearish Absorption can be used in combination with other indicators such as stochastic oscillator or moving averages to improve signal accuracy and avoid false positives.
Conclusion
Bearish Absorption is an important candlestick pattern in crypto trading, which can provide traders with information about a possible trend change and the beginning of a downward movement. This pattern can be used to make decisions about entering a short position or confirming the current bearish trend. However, as with any trading strategies, it is important to take into account the market context and additional factors to make the best decisions.
