Monthly cross star change + weekly medium Yang confirmation signal

The monthly cross star followed by a weekly medium Yang candle signals a high-probability bullish reversal in crypto, especially when confirmed by volume and market context.

Jul 28, 2025 at 12:07 am

Understanding the Monthly Cross Star Pattern in Cryptocurrency Trading

In technical analysis within the cryptocurrency market, the monthly cross star pattern is a crucial candlestick formation that often signals potential trend reversals. This pattern occurs when the opening and closing prices are nearly equal over a monthly period, forming a small real body with upper and lower shadows. The significance of this pattern increases when it appears after a prolonged uptrend or downtrend. When observed on a monthly chart, the cross star suggests market indecision and may indicate that the current momentum is weakening. Traders pay close attention to this signal because it can precede major price shifts. The cross star itself is neutral, but its implications depend heavily on the context—especially the preceding price action and volume.

To identify a monthly cross star, traders must ensure the following conditions are met:

• The candlestick body is extremely small or nonexistent.
• There are visible upper and lower wicks, indicating price volatility during the month.
• The pattern forms after a clear directional trend, either bullish or bearish.
• Volume during the formation month is relatively high, suggesting active participation.

Once a cross star appears, traders typically wait for confirmation from the following month’s candle to determine the next move. This is where the weekly medium Yang confirmation becomes essential.

Decoding the Weekly Medium Yang Confirmation Signal

The weekly medium Yang candle is a bullish signal in Japanese candlestick terminology, representing a strong upward close with a solid body and moderate wicks. When this appears in the week immediately following a monthly cross star, it acts as a confirmation of a potential bullish reversal. The term "medium" refers to the size of the candle body—it is neither extremely long nor short, indicating steady buying pressure without exhaustion.

For the confirmation to be valid, several criteria must be satisfied:

• The weekly candle must close above the high of the cross star week.
• The body of the candle should occupy at least 60% of the total range for the week.
• Trading volume should show an increase compared to the prior week, confirming participation.
• The candle must appear within the first four weeks after the monthly cross star formation.

This combination—monthly cross star followed by weekly medium Yang—is considered a high-probability setup in crypto trading, especially in assets like Bitcoin or Ethereum that exhibit cyclical behavior. The signal becomes stronger when aligned with key support levels or oversold conditions on oscillators like the RSI.

How to Identify and Validate the Signal on Trading Platforms

To apply this strategy effectively, traders must use platforms such as TradingView, Binance, or Bybit that offer detailed candlestick charting tools. The process involves multiple steps to ensure accuracy.

• Open the monthly chart of the cryptocurrency pair (e.g., BTC/USDT).
• Locate the most recent completed month’s candle and assess whether it forms a cross star (small body, long wicks).
• Switch to the weekly chart and examine the weeks following the cross star.
• Look for a medium-sized bullish candle that closes above the cross star’s high.
• Confirm the volume spike during the confirmation week using the volume indicator.

It’s critical to adjust the chart settings properly:

• Set the candlestick type to “Heikin-Ashi” for smoother trend visualization, but validate signals on standard candles.
• Use horizontal lines to mark the high and low of the monthly cross star.
• Apply a volume-weighted moving average (VWMA) to assess participation levels.

Traders should avoid acting on partial data. For instance, if the monthly candle is still forming, the signal is not yet valid. Only fully closed candles should be used for analysis.

Practical Trading Strategy Based on the Signal

When both the monthly cross star and weekly medium Yang are confirmed, a structured entry and risk management plan should be implemented.

• Enter a long position at the close of the confirmation weekly candle.
• Place a stop-loss just below the low of the cross star month to limit downside.
• Set a take-profit target at the nearest significant resistance level, or use a risk-reward ratio of at least 1:3.
• Consider scaling in if the price retests the breakout zone with low volume.

Position sizing should reflect volatility. For highly volatile altcoins, reduce exposure. For major pairs like ETH/USDT, standard position sizes can be applied. Use trailing stops once the price moves favorably to lock in profits during extended moves.

Additionally, traders can enhance the signal’s reliability by combining it with:

• On-chain data, such as exchange outflows indicating accumulation.
• Funding rates on perpetual contracts to assess market sentiment.
• Relative Strength Index (RSI) showing a move from oversold to neutral territory.

This multi-layered approach reduces false signals and increases confidence in the trade setup.

Common Pitfalls and How to Avoid Them

Even with a well-defined signal, traders often make mistakes that undermine their results. One major error is acting prematurely—entering before the weekly candle closes. A candle that looks like a medium Yang on Friday might reverse by market close, invalidating the signal.

Another issue is ignoring the broader market context. If Bitcoin is in a strong downtrend, a bullish signal on a minor altcoin may fail due to market-wide selling pressure. Always check the BTC dominance chart and overall market structure.

Overlooking exchange-specific anomalies can also be costly. For example, low-volume exchanges may show misleading candle patterns due to thin order books. Stick to high-liquidity platforms for analysis.

Lastly, confirmation bias leads many to see the pattern even when criteria aren’t fully met. Maintain a checklist and backtest the strategy on historical data to ensure objectivity.

Frequently Asked Questions

Can the monthly cross star appear during a sideways market?

Yes, the monthly cross star can form in consolidation phases. However, its predictive value is lower in such cases. The signal carries more weight when it appears after a clear trend, as it reflects a shift in momentum rather than ongoing indecision.

What if the weekly medium Yang candle has a long upper wick?

A long upper wick suggests rejection at higher prices. For a valid confirmation, the body should dominate the candle, and the wick should not exceed 30% of the total length. Excessive wicks indicate hesitation and weaken the bullish case.

Is this signal applicable to all cryptocurrencies?

The pattern works best on high-market-cap assets like Bitcoin and Ethereum due to their liquidity and consistent trading volume. Low-cap altcoins with erratic price action may generate false signals due to manipulation or low participation.

How long should I hold the position after entry?

Holding duration depends on the target level and market response. Monitor price action at resistance zones. If the asset meets resistance and forms reversal patterns (e.g., shooting star), consider exiting. Otherwise, let the trailing stop manage the position.