The Bullish Hikkake pattern is typically considered a continuation pattern, though it can sometimes signal a reversal depending on its context within the trend. It occurs after a false breakout from an inside bar. It reflects a temporary trap for traders who expect a breakout in one direction, only to see the price reverse and move in the opposite direction. The pattern forms when an inside bar is followed by a breakout to the downside (appearing bearish), but the price quickly reverses and breaks above the high of the inside bar within a few candles.

In an uptrend, the Bullish Hikkake often signals a brief consolidation or pullback before the trend continues upward. The failure of the initial bearish breakout traps short sellers, and the subsequent bullish move confirms strength in buying pressure. This is why it's generally viewed as a continuation pattern.

However, if found near the end of a downtrend or after an exhaustion move, it can act as a reversal signal, especially when supported by other indicators or volume spikes. Traders often look for confirmation with a close above the high of the inside bar and increasing momentum to validate the pattern’s bullish intent.