medium · Volume Price Analysis testing
A currency pair has been in a distribution phase for two weeks. Today, a candle rises back into the ceiling of the distribution zone, prints a shooting star with a very long upper wick, and volume is 0.35× the 20-bar average.
What is the most likely outcome?
- A failed test of supply, meaning more accumulation is still required
- The markdown phase is likely starting soon as the test of demand was successful.
- The insiders are likely stop-hunting the wick; wait for a second, higher-volume test
- A bullish breakout is likely here, since the low volume shows a clear lack of genuine selling
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