Ah, the elusive 80/20 candle...
I've been talking about the 80/20 candle quite a lot and there are of course different types. One is red which is starting to form on VARA's weekly chart, it has not confirmed there yet but on SHIB's chart we have a full fledged 80/20 hammer candle and because the candle is green the candle can exceed 20% and still be considered confirmed. The way it often works is a large wick forms off of support level which in this case is that massive order block just below the wick. This indicates that traders, especially bargain traders have chosen that is the best price in that session and thus everyone buys in. The result is often a very quick V recover similar to what we often see in the stock market following any random crash.
While the 80/20 candle doesn't guarantee a reversal it has a very high statistical success rate of 80% plus depending upon the asset class you are looking at. Just be warned that the success rate in this specific asset class is a little lower on the lower time frames but very high on the weekly and monthly candle chart.
I am not a financial advisor. Trade safely my friends.
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