Crypto candlestick charts are visual tools that tell the “story” of price movements within a specific timeframe. They go beyond simple lines by showing market psychology and the battle between buyers and sellers.

I. Anatomy of a Candlestick

Component	What it Represents
Real Body	The wide middle section showing the range between the Opening and Closing prices.
Wicks (Shadows)	The thin lines above and below the body. The top indicates the Highest price; the bottom indicates the Lowest price.
Color	Green (Bullish): Price closed higher than it opened. Red (Bearish): Price closed lower than it opened.

II. Interpreting Market Pressure

• Body Length: A long body signals strong market conviction and pressure. A small body indicates indecision or minimal price change.

• Lower Wicks: A long wick at the bottom suggests that sellers tried to push the price down, but buyers stepped in aggressively, indicating potential upward movement.

• Upper Wicks: A long wick at the top suggests buyers pushed the price high, but sellers took profits, signaling a potential sell-off.

III. Common Candlestick Patterns

Bullish (Reversal/Continuation)

• Engulfing: A large green candle fully “swallows” the previous small red candle, showing buyers have overtaken sellers.

• Morning Star: A three-candle pattern (long red, small middle candle, long green) indicating a shift from a downtrend to an uptrend.

• Rising Three Methods: A continuation pattern where a large green candle is followed by small red “resting” candles before the upward trend resumes.

Bearish (Reversal/Continuation)

• Evening Star: The opposite of the Morning Star; it signals the bulls are losing control at the top of an uptrend.

• Shooting Star: A small body at the bottom with a very long upper wick, showing that high prices were rejected by the market.

• Falling Three Methods: A long red candle followed by small green “resting” candles, confirming the downtrend will likely continue.

IV. Conclusion

Candlesticks are essential for Technical Analysis. By identifying these patterns, you can better predict shifts in market sentiment. However, they are most effective when combined with other indicators like volume or RSI to confirm the strength of a move.