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A five-candle reversal. Gap up, stall, then collapse closing the gap. The breakout failed.
The Bearish Breakaway is a five-candle reversal pattern that signals the end of an uptrend. It begins with a strong bullish candle, followed by a gap up and three more bullish candles with diminishing momentum, and ends with a large bearish candle that closes within the gap created after Candle 1.
The pattern shows a market that overextends to the upside — each candle pushes higher but with less conviction — until bears finally break back through. The bearish candle 'breaks away' from the exhausted rally, closing the gap and signaling that the uptrend has run out of fuel.
The Bearish Breakaway captures the exhaustion of an overextended rally. Candle 1 is a strong bullish candle, confirming the uptrend is healthy. Candle 2 gaps up — momentum seems to be accelerating.
Candles 3 and 4 continue higher but the bodies get smaller. The rally is stalling. Buyers are still present but losing conviction. Each new high is made with less enthusiasm — a classic sign of trend exhaustion.
Candle 5 is the breaking point. A large bearish candle reverses sharply, closing within (or below) the gap between Candles 1 and 2. This sudden reversal traps late buyers and triggers a cascade of selling as the market recognizes the uptrend is over.
Conservative: Enter short when Day 5 closes below Day 1's close (gap closed).
Aggressive: Enter short during Day 5 when it breaks below the gap.
Above the high of the first candle in the pattern (the gap candle). This is the point of no return - if price reclaims it, the breakaway has failed.
T1: Previous support level. T2: Measured move equal to the range of the five-candle pattern projected downward. The strong momentum suggests holding partial position with a trailing stop.
Minimum 1:2. The multi-candle buildup often leads to sustained moves.
The Bearish Breakaway is relatively rare, especially in crypto where true gaps require exchange-specific conditions. Its value lies in the exhaustion narrative — five candles showing progressive weakening followed by a decisive reversal.
Long bullish candle, gap up, then gradual decline. The unfilled gap becomes resistance.
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