Hammer / Pin Bar

Candle with long lower wick - shows buyers absorbing the dip.

Hammer = small body at top, long lower wick (>=2x body). Forms at the end of a drop: price fell intraday but buyers bid it back. The longer the wick and higher the body, the stronger the signal. Pin bar = same pattern in a trend. Opposite (wick on top) is shooting star.

In plain words

A candle with a long leg below says: price dropped deep but buyers scooped it all back before the session ended.

Example

BTC Aug 5, 2024: daily hammer at 49k with wick to 45k after the Japan crash -> bounced to 60k in 3 weeks.

Also known as: pin bar, hammer, shooting star

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