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 93 times on BTC 1d; across the most recent 93, price reached the small target (+0.25%) first about 54% of the time. Widen the target to ±1% and it becomes about 54%. 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% | 54% | +0.02% |
| ±0.5% | 57% | +0.07% |
| ±0.75% | 57% | +0.10% |
| ±1% | 54% | +0.08% |
| ±1.5% | 57% | +0.21% |
| ±2% | 55% | +0.20% |
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 | 76% | -1.09% | N=25 |
| Sideways | 83% | -0.70% | N=30 |
| Bull market | 83% | -0.70% | N=36 |
Recent occurrences
How far price actually moved the last few times this signal fired (MFE = maximum favorable excursion).
| Date | MFE | Result |
|---|---|---|
| 2026-03-01 | 0.0% | — 🔴 stopped |
| 2026-03-26 | 7.97% | ✅ hit |
| 2026-04-02 | 1.85% | ✅ hit 🔴 stopped |
| 2026-04-22 | 4.09% | ✅ hit |
| 2026-04-25 | 4.6% | ✅ hit 🔴 stopped |
| 2026-04-27 | 4.5% | ✅ hit 🔴 stopped |
| 2026-05-15 | 10.04% | ✅ hit |
| 2026-05-19 | 0.74% | ✅ hit 🔴 stopped |
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