How to use the three crows candlestick combination to determine the market top?

The three crows are a combination of three consecutive negative lines, which often appear at the end of the upward trend, indicating the top of the market and need to be confirmed in combination with other technical indicators.

Apr 03, 2025 at 03:18 pm

Three Black Crows are a classic K-line combination form that is often used to judge the top of the market in technical analysis. This pattern consists of three consecutive negative lines, the opening price of each negative line is within the entity of the previous K-line, and the closing price gradually decreases. This pattern usually appears at the end of an uptrend, indicating that the market may be about to reverse.

Identification characteristics of 'Three Crows'

When identifying the three crows , you need to pay attention to the following key characteristics:

• Three continuous yin lines : The shape is composed of three continuous yin lines.

• The opening price is within the entity of the previous K-line : the opening price of each negative line is within the entity range of the previous K-line.

• The closing price gradually decreases : the closing price of each negative line is lower than the closing price of the previous negative line, forming a gradual downward trend.

The connection between 'Three Crows' and the top of the market

When the three crow patterns appear at the end of the uptrend, they are often regarded as important signals at the top of the market. The reason is:

• Selling pressure increases : Three consecutive negative lines indicate that the selling pressure is gradually increasing, and market sentiment shifts from optimism to pessimism.

• Buyer weakness : The opening price of each negative line is within the entity of the previous K line, indicating that the buyer is unable to maintain the price increase.

• Prices gradually decline : The gradual decline in closing prices shows that the market is losing momentum to rise and may enter a downward phase.

How to use the 'Three Crows' to judge the top of the market?

To use the three crows to determine the top of the market, you need to combine the following steps:

• Confirm the upward trend : First, ensure that the current market is in an upward trend. It can be confirmed by observing the long-term K-line chart.

• Identify the 'Three Crows' form : In the upward trend, look for three consecutive negative lines that match the characteristics of three crows .

• Verify the validity of the pattern : Confirm that the opening price of each negative line is within the entity of the previous K line, and the closing price gradually decreases.

• Combined with other technical indicators : In order to improve the accuracy of judgment, comprehensive analysis can be carried out in combination with other technical indicators, such as moving averages, relative strength indicators (RSI), etc.

Things to note in actual operation

In actual operation, when judging the top of the market using the three crows , you need to pay attention to the following points:

• Avoid premature judgment : Confirmation at the top of the market takes time, and premature judgment may lead to misjudgment.

• Combined with trading volume analysis : If the three crow patterns are accompanied by a significant increase in trading volume, the possibility of the market top is greater.

• Observe the subsequent trend : After confirming the three crows , observe the trends of the subsequent K-lines. If the market continues to decline, the possibility of top confirmation is higher.

Case Study: Application of 'Three Crows' in the Bitcoin Market

Taking the Bitcoin market as an example, assuming that in April 2021, the Bitcoin price is on the upward trend, and there are three crow patterns on the K-line chart:

• The first negative line : the opening price is $60,000 and the closing price is $58,000.

• The second negative line : Opening at $58,500 and closing at $56,000.

• The third negative line : Opening at $56,500 and closing at $54,000.

In this case, the emergence of the three crow patterns indicates that the Bitcoin market may have reached its top and investors need to be cautious about subsequent market trends.