Lack of Volume Suggests $BTC Bottom Has Yet To Come by Hash Rater | Jul 23, 2018 | Daily TA | 1 comment Volume is a crucial indicator. [insert analysis here] 1 Comment The Flatline on July 27, 2018 at 7:14 am Most traders that use Technical Analysis as their primary tool for positions will agree that aside from price action itself, volume is the most important additional piece of information. It’s commonly said that “volume leads price.” Meaning important moves such as trend reversals and breakouts are seen in volume first. Generally, important shifts in the tide, so to speak, are characterized by massive volume spikes. A “volume spike” is when the volume for that time frame prints a bar that is AT LEAST, twice the size of the bars adjacent to it. The completion of classical chart patterns, such as triangles, are accentuated at their finale with a volume spike. More specifically, the volume spike is when price breaks out of the pattern. In summary, any major change in market sentiment should have a corresponding significant increase in volume. Above, we have bitcoin, linear scale, from roughly mid 2014 to present time (mid 2018). At the end of 2014 there was a major correction in Bitcoin price in which it retraced roughly 87% (open to interpretation depending on where exactly one places their Fib levels). The first large volume spike was when the trend line finally stopped going downward and definitively entered accumulation or sideways movement. The second large volume increase was when the trend finally started moving in a consistent positive trend again (consecutive higher highs and higher lows). The purpose of this post is to remind ourselves of where we are in the current correction. An equity/stock tends to demonstrate similar behavior in similar scenarios, ie. if stock “X” in the past has retraced ~70-75% in all its prior major corrections then, it will most likely retrace the same amount on subsequent ones. Similarly, if Bitcoin tends to retrace about 85% on its corrections then, we should expect this pullback to be similar. This is not a hard and fast rule. It is not fact. It is merely, “odds, most likely.” As of writing this (the last week of July 2018), we have only retraced about 75-77% (again depending on where you place your Fib levels). This is supported by the fact that volume is still decreasing. Despite the recent price surge. I will not conclude reversal until we have a decisive volume spike, amongst other things (higher lows and higher highs consistently). A trader must always be aware of the macro scale, big picture. The trend is your friend. Reply Submit a Comment Cancel reply Your email address will not be published.Comment Name Email Website Notify me of follow-up comments by email. Notify me of new posts by email.