VolumePriceDivergence

Volume Divergence – Types & Explanation

Volume divergence means:
The price is saying one thing, but the volume is saying something else.
In simple terms, the price is moving in one direction, but the strength behind that move (buyers or sellers) isn't as strong as it looks — which raises doubts about a trend reversal or a fake breakout.

1. Bearish Volume Divergence
Price: Making a higher high
Volume: Making a lower high
What signal does this give?
It shows that the price is going up, but buyers aren't as interested. Momentum is weakening.

Result: Weak uptrend or possible reversal downwards.
Real-life analogy: Like someone running fast in a race but out of breath — looks like they might stop soon.

2. Bullish Volume Divergence
Price: Making a lower low
Volume: Making a higher low
What signal does this give?
The price is falling, but the selling pressure is getting weaker. There's a chance of an upward reversal.

Result: Weak downtrend or a bullish reversal.
Real-life analogy: Like someone who’s fallen, but didn’t get hurt much — looks like they’ll get back up.

Bonus: Hidden Volume Divergence (Advanced)
This is a slightly advanced concept, but professional traders use it to spot trend continuation.

3. Hidden Bearish Volume Divergence
Price: Lower high
Volume: Higher high
Interpretation:
The price is making a lower high (indicating a downtrend), but volume is increasing — this suggests sellers are strong, and the downtrend may continue.

4. Hidden Bullish Volume Divergence
Price: Higher low
Volume: Lower low
Interpretation:
The price is making a higher low (indicating an uptrend), but volume is decreasing — this suggests buyers are building quietly, and the trend may continue.

Conclusion (Professional Note):
Regular Divergence → Indicates trend reversal
Hidden Divergence → Indicates trend continuation
And divergence signals become even stronger when you combine them with price action, support/resistance, and indicators like MACD or RSI.

#VolumePriceDivergence

Volume-Price Divergence: A Key Indicator for Mid-Term
Operations (1/100)

As part of our ongoing lecture series, this update will focus on volume-price divergence in mid-term operations. Volume is a crucial tool for understanding market movements, especially when it comes to altcoins. Unlike the K-line charts, which can sometimes mislead, volume gives a clearer picture of market activity. High volume signals strong participation and market interest, while low volume suggests a lack of attention.
When analyzing a market with a double-top structure, it is essential to observe the volume at each peak. If the second top shows lower volume than the first, the likelihood of a price drop increases significantly. In such cases, consider shorting the market towards the neckline, as this indicates a high probability of a reversal. Similarly, if a market is rising but the volume is consistently declining, this could signal a potential exhaustion of momentum. For example, in the case of $SUI, where volume has been diminishing on a weekly chart, this suggests the market may not sustain its upward trend without volume support. In such instances, taking profit or setting stop losses is a wise decision until volume picks up again.
The principle of volume exhaustion can be understood through the analogy of a famous actor whose popularity begins to fade despite increasing pay. Over time, if the demand for his performances dwindles, the actor must lower his price to regain attention. In a similar way, a market with decreasing volume may struggle to sustain rising prices, and it is crucial to adjust your trading strategy accordingly.
Finally, it’s important to recognize that the best signals for volume-price divergence typically emerge in the 4-hour, daily, and weekly timeframes. Smaller timeframes tend to have more noise and are less reliable, as they can be affected by factors like liquidation data.

#CryptoTrading #VolumePriceDivergence #MidTermStrategy

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