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Want to avoid detours in the crypto world? Mastering the relationship between volume and price is equivalent to understanding the strategies of the big players.
**How to Read an Uptrend**
If Bitcoin shows a rapid rise followed by a slow decline, the main force is likely quietly distributing. It's best not to buy in at this point. Conversely, a sharp decline followed by a slow rise often indicates the main force is secretly accumulating. Holding your positions firmly is the best strategy here.
A surge in volume during an upward move? Be prepared for a correction in the short term and avoid blindly chasing highs. A volume-increasing rally suggests momentum is still building, and the price will continue to rise. Hold on tight.
**How to Read a Downtrend**
A volume-increasing decline isn’t something to fear too much; historical experience shows there will inevitably be a rebound. The key is not to panic and cut your losses. A volume-decreasing decline requires patience, as the main force is still probing for bottom levels. Keep your hands steady and avoid reckless actions.
Sudden sharp drops at low levels? These are often called golden pits. Adding positions during these times might be a good opportunity. Conversely, a rapid decline with no volume increase may indicate a bullish outlook for the future, so don’t be scared off.
**Signals of a Consolidation Trend**
A decrease in volume without a price drop usually indicates the bottom has been confirmed, and you can prepare to buy the dip. High-level consolidation or slight declines with decreasing volume? Don’t rush to sell; the main force might be shaking out weak hands or deliberately inducing a trap. A sudden large bullish candle at a low level, followed by a pullback, is an excellent buying opportunity.
These rules also apply to mainstream coins like Ethereum and Binance Coin. After a volume breakout, adjustments can last a long time, so it might be safer to wait. But when trading volume increases and the trend turns upward, it’s time to follow the momentum.
Remember these volume-price principles. Next time the main force tries to play tricks, you’ll see through it at a glance. Hold your chips and wait for the next wave of market movement.