🐻

Bear Signal Overview | InvaderSignals

Reversal warning signal alerting when sellers are attempting to form a top. During strong uptrends it acts more often as a pitstop marker, signaling the trend will likely pause/chop before extending any further.

The 🐻 signal is often accompanied by overbought conditions. This means that price may have risen too quickly and too far, and it could be due for a correction or reversal in the near future.

In other words, it suggests that the asset is overvalued and that buying pressure may be exhausted. Traders can interpret this as a signal to sell or take profits on buys.

Novice traders tend to enter long positions as prices rise, often without considering the technical indicators, and these traders often continue to buy without realizing the trend may soon reverse. Advanced traders use this herd mentality to their advantage by shorting the asset and profiting from the upcoming correction.

🐻 signals accompanied by candlestick patterns such as shooting stars or dojis at the top of an uptrend can also be helpful when trying to analyze if buyers are losing control and/or sellers are starting to take over. Traders can use this signal to identify potential short-term and long-term market tops, as it is built to detect when the current trend has a high probability of nearing an end.

It's important to remember that buyers may continue driving the price up for an extended period before becoming fully exhausted. Therefore, traders should always consider other factors and use additional indicators or analysis to confirm their trading decisions.