Hammer Pattern: Shape, Meaning, and Examples on Crypto Charts
Schematic of the Hammer shape. What matters is the proportion of body and wicks, not the price figures.
Hammer pattern shape
- A small, solid body taking up less than half of the candle's range, located at the top.
- A long lower wick, at least twice the length of the body.
- Sumbu atas pendek, tidak lebih panjang dari badan, siluetnya seperti palu dengan gagang ke bawah.
General meaning
A hammer records a period that opened, was pushed down quite far, then closed back near the top of its range. Most of the decline within the period didn't hold. The shape shows rejection of lower prices within one period, not a reversal that has already happened.
Where it usually appears
Often appears at the end of a series of declines, around price areas that previously held declines, and after a wave of liquidations that briefly drags price down.
Worth noting. A hammer that appears in the middle of an ongoing decline is often followed by nothing. CryptoHalley's engine assigns strength 3 only when the lower wick is at least three times the body and the range exceeds average volatility.
See live detection on the chart
The CryptoHalley chart engine marks Hammer automatically with id hammer, no extra indicator needed. Open the chart and browse the labeled candles.
FAQ
- Does the color of a hammer's body matter?
- Only a little. What defines a hammer is the ratio of the lower wick to the body, not whether the candle closed slightly above or slightly below its open. CryptoHalley's engine ignores color when marking a hammer.
- What's the difference between a hammer and a hanging man?
- The shape is identical; only the position differs. It's called a hammer when it appears after a decline and a hanging man when it appears after a rise. CryptoHalley marks the shape as a hammer and leaves the context to the chart.
- How long does the lower wick need to be to count as a hammer?
- At least twice the length of the body, with an upper wick no longer than the body, and a body taking up at most half the range. The thresholds are relative to ATR 14, so the same rule applies to penny coins and Bitcoin alike.