What is Bearish engulfing? — chart signal explained
The same tug-of-war idea, mirrored. A green (up) candle is immediately followed by a red (down) candle whose body swallows the entire green body.
When does it fire? — BaroBara criteria
The signal fires when the prior candle is green, the current one is red, and the red body covers the green one completely — opening at or above the prior close and closing at or below the prior open.
How traders usually read it
The usual reading: buyers lifted the price, and sellers slammed it right back down within a single candle. Many traders take that as an early sign a rally could be losing steam.
What to watch out for
In a strong uptrend this shape often just marks a one-day pause before the climb resumes. A big candle also simply means volatility picked up, so it can end up being a choppiness warning rather than a turn. And since only bodies are compared, long-wicked candles may not match the impression the chart gives.
What the data actually shows (BTC 1d)
The common reading is a drop — but what actually happened matters more. This signal has fired 85 times on BTC 1d; across the most recent 85, price reached the small target (+0.25%) first about 61% of the time. Widen the target to ±1% and it becomes about 52%. A historical probability, not a guaranteed direction — and it shifts with market regime.
Odds and expected value — with symmetric target and stop (±)
Exactly the barobara framing: which side got hit first, +X% or −X%. Target and stop are set to the same %, and the win rate is how often the upside (+X%) was reached first.
| Target = stop (±) | Win rate (+ first) | EV (before fees) |
|---|---|---|
| ±0.25% | 61% | +0.05% |
| ±0.5% | 61% | +0.11% |
| ±0.75% | 52% | +0.03% |
| ±1% | 52% | +0.04% |
| ±1.5% | 52% | +0.06% |
| ±2% | 51% | +0.04% |
Broken down by market regime
⚠️ This table uses a different basis than the symmetric (±) table above — a small +0.25% target with a wide −5.0% stop (fees included). The small target makes the win rate look high while EV is often negative — exactly what signal groups hide. And the same signal behaves differently across regimes.
| Regime | Win rate (+0.25% target) | EV (−5.0% stop) | Sample |
|---|---|---|---|
| Bear market | 78% | -0.97% | N=23 |
| Sideways | 89% | -0.41% | N=27 |
| Bull market | 87% | -0.50% | N=31 |
Recent occurrences
How far price actually moved the last few times this signal fired (MFE = maximum favorable excursion).
| Date | MFE | Result |
|---|---|---|
| 2026-03-29 | 0.0% | — 🔴 stopped |
| 2026-04-02 | 1.73% | ✅ hit 🔴 stopped |
| 2026-04-12 | 0.0% | — 🔴 stopped |
| 2026-04-27 | 3.62% | ✅ hit 🔴 stopped |
| 2026-05-15 | 9.68% | ✅ hit |
| 2026-05-22 | 5.32% | ✅ hit |
| 2026-05-26 | 25.73% | ✅ hit |
| 2026-05-31 | 24.98% | ✅ hit |
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