Unraveling the Mystery of Back-to-Back Weekly Hammer Candles in Bitcoin
Bitcoin, the world’s most popular cryptocurrency, has recently experienced something unusual: back-to-back weekly hammer candles. This might look interesting on charts, but it also has important meanings for people who trade or invest in Bitcoin. Let’s find out what these hammer candles mean, when they’ve happened before, and what they might tell us about Bitcoin’s future.
What are Hammer Candles?
A hammer candle is a special kind of candle on a chart where the bottom part (wick) is much longer than the middle part (body). This usually means that the price moved a lot in one direction, but then it changed and moved back in the other direction. This pattern often signals that the market might be changing direction.
When Have These Happened Before?
Checkmate’s research shows that Bitcoin has had a weekly hammer candle with a very long lower wick (90% or more) only five times in its history[1]. These times were during big changes in the market, like the big increase in price in 2017, the peak of the bull market in late 2021, and twice in 2023 after the problems with Silicon Valley Bank and a drop in the summer. The last time was in 2024 during a quiet period in the summer. Because this pattern is so rare, it might be a very important turning point in Bitcoin’s price.
What’s Happening Now?
In the past two weeks, Bitcoin’s price has gone up and down a lot, with one week having a 23% change and the next week having a 16% change[1]. These big movements show how volatile Bitcoin can be. Even though the price is going up and down, CryptoQuant’s CEO thinks that Bitcoin is still in a period where prices are generally going up, and even if the price goes down to $77,000, it wouldn’t mean the end of this period.
What Does This Mean for Investors?
The back-to-back hammer candles might mean that Bitcoin’s price could change direction or stabilize. But investors should also think about other things that could affect the price, like support levels. For example, people who invested in U.S. Bitcoin ETFs have a cost basis of $89,000, which is a strong support level[2]. Also, if the price goes below $57,000, Bitcoin miners might start losing money, which has happened at the start of bear markets in the past[2].
Conclusion: A Strong Signal in Volatile Times
In short, the back-to-back weekly hammer candles in Bitcoin are a rare and important event. They don’t guarantee what will happen, but they can give us clues about big changes in the market. As Bitcoin goes through volatile times, understanding these patterns can help investors and traders make better decisions. Whether Bitcoin is about to go up or down more, these hammer candles are a strong signal that we should pay attention to in the ever-changing world of cryptocurrency.
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