Bearish Engulfing
A reversal pattern that forms after a rise, when a large red candle completely engulfs the body of the previous green candle. It can signal that buying pressure is fading and sellers are starting to take control.
How it forms
- It follows a clear rise. Since it is a reversal signal, there needs to be a move to reverse.
- Candle 1 is green: it closes above its open.
- Candle 2 is red: it closes below its open.
- The body of candle 2 completely covers the body of candle 1: it opens at or above candle 1's close and closes below candle 1's open.
In crypto, candle 2 usually opens at candle 1's closing price. The rule is about bodies, so an open equal to the previous close is enough. No gap is required.
What it suggests
The first candle shows buyers are still in control. The second candle, over the same length of time, gives back all of the buyers' gains and closes below them. This suggests the balance may be starting to shift in favour of sellers.
On its own, the pattern does not prove that the rise is over. Read it as a hint that the advance is tiring, and weigh it together with other evidence.
When it strengthens, when it weakens
Strengthens
- Forming at a resistance zone
- A clear rise before the pattern
- High volume on candle 2
- Candle 2 also covering candle 1's wicks
- Forming on a higher timeframe (4H, 1D)
Weakens
- Forming in a flat, directionless market
- Both candles being very small
- Low volume
- A strong support zone just below
- Forming on very low timeframes (1m, 5m)
The MarketLevelMap view
How it relates to zones
A bearish engulfing stands out most when price reaches a resistance zone. The zone marks an area where price has met selling before; the pattern can show sellers regaining the upper hand there. When candle 2's wick reaches into the zone but its body closes below it, the attempt to clear the zone can be read as rejected.
The first support zone below the pattern matters too. If support is very close, there is little room for a decline and the pattern is considered weaker. If it is further away, price has more space to move.
When it is invalidated
If price closes above the pattern's highest point (including both candles' wicks), the bearish scenario is considered invalid. If the pattern formed at a resistance zone, a close above the zone means the same.
A candle that only wicks above the high and closes back below it does not invalidate the pattern on its own.
Often confused with
- Bullish EngulfingThe opposite: after a decline, a green candle engulfs the red one.
- Dark Cloud CoverThe red candle closes below the middle of the green body but does not cover all of it.
- Bearish HaramiThe inverse relationship: a small red candle sits inside a large green body.
For general information only. Not investment advice.Last updated: