Shooting Star (Falling Hammer) Candlestick Pattern Explained
Table of Contents
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
Overview of the Falling Hammer Candlestick Pattern
The falling hammer candlestick - more commonly known as the Shooting Star - is a bearish candlestick pattern that appears after a price uptrend. It signals a potential reversal - a point where bullish momentum fades and selling pressure begins to dominate. Traders often use the Shooting Star to exit long positions or prepare for potential short opportunities.
This single-candle pattern is popular among crypto traders for its simplicity and reliability, especially when it forms near known resistance levels or alongside confirmation indicators like volume or trendline breaks.
In this article, we’ll explore what the Shooting Star candlestick pattern is, how to identify it, what it signals about market psychology, and how traders can use it to anticipate bearish reversals more effectively.
What is a Shooting Star Candlestick?
A Shooting Star forms when the market opens, rallies significantly, but then retraces most of its gains to close near the opening price. The result is a small real body at the lower end of the candle and a long upper wick.
This candle tells a clear story: buyers tried to push the price higher, but sellers stepped in and overwhelmed them by the close.
| Characteristic | Description |
|---|---|
| Trend | Must appear after a strong uptrend |
| Upper wick | At least 2-3 times the size of the body |
| Real body | Small and located near the low |
| Lower shadow | Very short or nonexistent |
| Candle color | Red (bearish) preferred, but green is acceptable |
The candle’s body may be red or green, but what matters most is the long upper wick and the location after an uptrend. Without that context, it isn’t a Shooting Star.
The Shooting Star suggests that buyers initially pushed the price higher, but sellers stepped in and drove it back down - indicating potential weakness and a possible bearish reversal.
Psychology Behind the Pattern
The Shooting Star reveals a shift in market sentiment:
- Uptrend in place - Bulls are in control, and prices are rising.
- FOMO kicks in - Late buyers rush in, pushing prices to new highs during the session.
- Rejection - Sellers take advantage of the higher prices and drive the market down.
- Bearish signal - The candle closes near its opening price, leaving a long upper wick - a visual cue of failed bullish momentum.
This formation can trap bullish traders and trigger profit-taking, especially near resistance zones, leading to sharp corrections.
Formula / Identification Criteria
To qualify as a Shooting Star (Falling Hammer), a candlestick must meet the following criteria:
- Upper Shadow ≥ 2 × Body
- Lower Shadow ≈ 0
- Close ≤ Open (red preferred, but green acceptable)
- Trend: Must appear after a clear uptrend
Strengths and Limitations
Strengths:
- Simple to identify and interpret
- Helps spot potential trend reversals at market tops
- Works well when combined with resistance levels, RSI, and volume analysis
Limitations:
- False signals are common without confirmation from the next candle
- Less reliable on low-volume assets with erratic price action
- Short-term timeframes (e.g. 1-minute or 5-minute) often produce noise; higher timeframes are more dependable
- Easily confused with the Inverted Hammer - trend context is essential for correct identification
Conclusion
The Shooting Star is more than just a visually striking candlestick - it’s a clear signal that bullish momentum may be stalling and a potential trend reversal is on the horizon. When it forms after a strong uptrend, especially near a known resistance level or with a confirming drop in price, it can be a powerful tool for identifying exit points or short setups.
But like all candlestick patterns, context is everything.
Don’t trade the Shooting Star in isolation. Instead, treat it as part of a broader system that includes volume, resistance levels, trendlines, and other indicators. Wait for confirmation, define your risk, and plan your trades with discipline.
Mastering this one-candle pattern won’t guarantee profits - but it can help you avoid buying into market tops and sharpen your timing when momentum shifts.
Next Steps
- Learn about the Bullish Engulfing pattern in our next article to deepen your understanding of bearish reversal signals.
- Explore more technical indicators such as RSI, MACD, and moving averages to combine with candlestick patterns for stronger confirmation.
- Practice identifying Shooting Star patterns on real charts using free tools or your preferred exchange platform.
By integrating the Falling Hammer pattern into a broader trading strategy that includes confirmation signals and risk controls, traders can more effectively anticipate potential trend reversals from bullish to bearish and make more confident decisions.
Explore Related Articles:
- A Beginner’s Guide to Candlestick Charts
- Rising Bullish Hammer Candlestick Pattern Explained
- Bullish Engulfing: A Signal That Buyers Are Taking Over
- Bearish Engulfing: A Signal That Sellers Are Taking Control
- Morning Star Pattern: A Signal That Buyers Are Stepping In
- Evening Star: A Signal That Sellers Are Stepping In
- Golden Cross: A Signal That Bullish Momentum Is Building
- Bearish (Death) Cross: A Signal That Momentum May Be Turning Against the Market
- Pi Cycle Top: A Signal That Bitcoin May Be Peaking
- What Is the MACD Indicator? A Guide to Moving Average Convergence Divergence in Crypto
- Relative Strength Index (RSI): Spotting Overbought and Oversold Markets
- Stochastic Oscillator: Measuring Momentum and Spotting Reversals
Get started by understanding the basics of cryptocurrency and explore decentralized finance (DeFi). Learn about Bitcoin, Ethereum, and altcoins. Also, discover how to buy and sell crypto.
Disclaimer
No Investment Advice
The information provided in this article is for educational purposes only and does not constitute investment advice, financial advice, trading advice, or any other type of advice. Bitcoin.com does not recommend or endorse the buying, selling, or holding of any cryptocurrency, token, or financial instrument. You should not rely on the content of this article as a basis for any investment decision. Always do your own research and consult a licensed financial advisor before making any investment decisions.
Accuracy of Information
While we strive to ensure the accuracy and reliability of the information presented, Bitcoin.com makes no guarantees regarding the completeness, timeliness, or accuracy of any content. All information is provided “as is” and is subject to change without notice. You understand that you use any information available here at your own risk.
Discover the top platforms for buying, selling, and trading cryptocurrencies
Discover the top platforms for buying, selling, and trading cryptocurrencies
Trading Features
Algorithmic TradingAutomated TradingArbitrage BotsCopy TradingDay TradingDemo Trading AccountsDerivativesCryptocurrencies
AaveAltcoinsAptosArbitrumArtificial SuperintelligenceAvalancheBinance CoinBitcoin CashBittensorCardanoChainlinkCosmosCronosDaiDogecoinEthereum ClassicFilecoinHederaImmutable XInjectiveKaspaLitecoinMakerMantleMoneroNear ProtocolNeoOKBOptimismPepePolkadotPolygonRenderRippleShiba InuSolanaStablecoinsStacksStellarSuiTezosToncoinTronUniswapExchange Types
Anonymous ExchangesCentralizedCryptocurrency BrokersCrypto To Fiat ExchangesDecentralizedFor BeginnersHybrid ExchangesLending PlatformsLowest FeesP2P Crypto ExchangesPaypal DepositSafest ExchangesSavings AccountsSwap PlatformsGeographic Regions
AlgeriaArgentinaAsiaAustraliaBahrainBrazilCanadaChinaColombiaCongoEgyptEuropeFranceGermanyGhanaHong KongIndiaIndonesiaIrelandItalyJapanKenyaKoreaMalaysiaMexicoMoroccoNetherlandsNew ZealandNigeriaNorwayPakistanPhilippinesRussiaSingaporeSouth AfricaSwitzerlandTanzaniaThailandTurkeyUgandaUnited Arab EmiratesRelated guides
Start from here →
What is a DEX?
A decentralized exchange (DEX) is a type of exchange that specializes in peer-to-peer transactions of cryptocurrencies and digital assets. Unlike centralized exchanges (CEXs), DEXs do not require a trusted third party, or intermediary, to facilitate the exchange of cryptoassets.
Read this article →What is a DEX?
A decentralized exchange (DEX) is a type of exchange that specializes in peer-to-peer transactions of cryptocurrencies and digital assets. Unlike centralized exchanges (CEXs), DEXs do not require a trusted third party, or intermediary, to facilitate the exchange of cryptoassets.
What is a CEX?
Learn about CEXs, the differences between them and DEXs, and whether they’re safe to use.
Read this article →What is a CEX?
Learn about CEXs, the differences between them and DEXs, and whether they’re safe to use.
How does crypto exchange work?
How safe is it to store your crypto on centralized exchanges?
Read this article →How does crypto exchange work?
How safe is it to store your crypto on centralized exchanges?
Bitcoin Trading for Beginners
A comprehensive guide to Bitcoin trading for beginners, covering wallets, exchanges, market analysis, and risk management strategies.
Read this article →Bitcoin Trading for Beginners
A comprehensive guide to Bitcoin trading for beginners, covering wallets, exchanges, market analysis, and risk management strategies.
Reading Bitcoin Charts for Beginners
A beginner's guide to understanding Bitcoin charts, covering candlestick patterns, technical indicators, market analysis, and risk management.
Read this article →Reading Bitcoin Charts for Beginners
A beginner's guide to understanding Bitcoin charts, covering candlestick patterns, technical indicators, market analysis, and risk management.
Bull vs. Bear Market
Learn about bull and bear markets, their characteristics, and effective strategies for each. Understand Bitcoin's role in these markets and how to navigate market volatility.
Read this article →Bull vs. Bear Market
Learn about bull and bear markets, their characteristics, and effective strategies for each. Understand Bitcoin's role in these markets and how to navigate market volatility.
Trading Analysis: Fundamental, Technical & Sentimental
Learn about fundamental, technical, and sentimental analysis for smarter trading decisions. Explore examples, tools, and how to combine these methods for a holistic market view.
Read this article →Trading Analysis: Fundamental, Technical & Sentimental
Learn about fundamental, technical, and sentimental analysis for smarter trading decisions. Explore examples, tools, and how to combine these methods for a holistic market view.
STAY AHEAD IN CRYPTO
Stay ahead in crypto with our weekly newsletter delivering the insights that matter most
Weekly crypto news, curated for you
Actionable insights and educational tips
Updates on products fueling economic freedom
No spam. Unsubscribe anytime.
Start investing safely with the Bitcoin.com Wallet
Over wallets created so far
Everything you need to buy, sell, trade, and invest your Bitcoin and cryptocurrency securely
Download App
© 2025 Saint Bitts LLC Bitcoin.com. All rights reserved
Download App
Company
Educate
Products & Services
Bitcoin Data
Follow
Get Crypto
Use Crypto
Exchanges
Crypto Games
Crypto Betting
© 2025 Saint Bitts LLC Bitcoin.com. All rights reserved