Butterfly Pattern

The Butterfly pattern is a five-point X-A-B-C-D harmonic reversal formation based on Fibonacci ratios. Its hallmark is point D completing beyond point X, typically at the 1.272 (up to 1.618) extension of the XA leg, with a mandatory 0.786 retracement at point B. It signals trend exhaustion and a possible reversal; its shallower reach distinguishes it from the Crab (1.618).