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How to interpret the reversal structure in the supply and demand trading model?
There are two categories here:
1. Engulfing Pattern: The stronger the momentum, the longer the body of the engulfing candlestick.
2. Multiple K-line reversal patterns: The momentum is significantly weaker than the first type. Usually, the first reversal K-line is a piercing pattern, requiring 2 or more consecutive K-lines to break through the low point of the consolidation area (Base) K-line (RBD) or the high point (DBR).
This is an example of a long position.
The inverse structure in the first blue circle on the left in the image below belongs to the first category. When BTC breaks out of the consolidation zone and rises, the momentum is sufficient, and the green bullish candles are significantly stronger than the red bearish candle bodies.
The remaining four belong to the multi-K line reversal pattern. The third blue circle on the chart is a very standard piercing pattern. Then continue to wait and see how the subsequent K lines move. It was found that it broke below the consolidation zone and touched the orange line EMA144, holding on, continuing the northern expedition, without taking out the previous small trend low, indicating weakening momentum.