Volume increases, open interest increases, prices decline
This combination of 'price, volume, open interest' indicates that both long and short sides have increased their positions, but the short side's behavior of actively increasing positions is more apparent. This also suggests that the short side is more resolute compared to the long side, and the bears have a greater confidence in the market continuing to decline. At the same time, the bulls are unwilling to admit defeat and are trying to buy at low levels in resistance; therefore, after this combination of 'price, volume, open interest' emerges, if the market overreacts and prices decline too much in the short term, it will trigger the bulls to increase their entry efforts and attract short-term traders to participate, combined with the short side taking profits and exiting. In this scenario, the likelihood of a V-shaped reversal in the market is quite high. It is possible to follow up and short during the early appearance of this 'price, volume, open interest' combination, but caution is needed for a trend reversal later.
