As shown in the image ⬇️, while the market is optimistic and everyone is waiting for the major asset to hit 110,000, I want to give everyone a risk warning ⚠️.
1⃣️Volume-Price Divergence:
As shown in the image ⬇️, the price on the daily level is increasing, but the volume has been decreasing (Volume-Price Divergence). This is a sign of strong control by the main players. They control a large number of chips, forcing the price to rise 📈. If a sudden surge in trading volume occurs in the subsequent upward movement, it means the main players have started to distribute their holdings!
2⃣️Ascending Channel:
The major asset has been in a continuous ascending channel on the daily level for a month (11.15-12.15). Tomorrow will close the monthly candle. We can take the descending channel below as an example. The upper breakout of the descending channel needs to be monitored. Once broken, it will create a strong upward momentum to push the market 📈. Whether it's an 'ascending channel' or a 'descending channel', both will eventually leave the channel area. At that point, how should we judge the topping behavior?
Method:
When there is a sudden surge in volume and a breakout at the top of the ascending channel, it means the top structure is about to appear. This is because the previous ascending channel has accumulated a lot of profit-taking positions. Retail investors will be overly excited about the breakout K-lines from the channel, leading to a herd mentality in chasing the rise. At this point, the main players will take the opportunity to distribute their holdings (as this is the best chance for them to profit).
Summary:
Volume-Price Divergence ➕ Ascending Channel ➕ Monthly Closing Approaches. Personally, I wouldn't dare to chase the rise and go long. I prefer to capture the top structure and focus on shorting at high levels. Altcoins can wait for the major correction to end before looking for good entry points.
