8 Typical Patterns of Trading Volume
1️⃣ Increased Volume Uptrend (True Strength)
Price rises, and trading volume significantly increases, indicating active buying from funds, suggesting that the trend is likely to continue.
2️⃣ Decreased Volume Uptrend (False Strength)
Price rises but trading volume decreases, lacking fund follow-up buying, considered a weak rebound or a precursor to a top.
3️⃣ Increased Volume Downtrend (True Weakness)
A decline accompanied by increased volume indicates concentrated fund outflow, with continued downward pressure in the future.
4️⃣ Decreased Volume Downtrend (Healthy Correction)
A decline but with reduced trading volume, insufficient selling pressure, mostly a normal pullback within the trend.
5️⃣ Low Volume (Bottom Area)
Trading volume drastically decreases, market at a freezing point, usually in a bottoming phase, but does not necessarily indicate an immediate rebound.
6️⃣ Increased Volume After Low Volume (Confirmed Bottom)
After low volume, a long bullish candle appears with increased volume, indicating new funds entering the market, a more reliable bottom signal.
7️⃣ High Volume (Top Risk)
A massive volume appears and the price struggles to rise, likely indicating a top or a signal for major distribution.
8️⃣ Accumulated Volume (Continuous High Volume)
Spending several days in a high volume range, low levels indicate accumulation, high levels indicate distribution, the key is to watch the position.
Volume and price should be analyzed together for trend, and divergences in volume and price indicate reversals.
Watch direction with increased volume, watch sentiment with decreased volume.
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