medium · Volume Price Analysis validation

In a validated downtrend, you observe a sequence of three down-candles. The bodies are widening (%1 drop, %2 drop, %3 drop), but the volume bars are declining (2.1M, 1.5M, 0.9M).

How should this sequence be interpreted?

  1. An anomaly suggesting the selling pressure is exhausted and a reversal is near.
  2. A successful, low-volume test of demand executed by insiders here.
  3. The early start of a markup phase driven by quiet, hidden institutional buying now.
  4. A price waterfall showing healthy, high-volume bearish momentum that keeps accelerating lower.

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