medium · Volume Price Analysis vpa-core
A trader identifies a 'Double Top' pattern. The first peak printed a shooting star on $5.0M volume. The second peak, two weeks later, prints a shooting star at the same price but on $2.8M volume.
How is this interpreted?
- A failed test of demand that requires a third peak to be formed before acting.
- Bearish, as the volume divergence confirms that buying interest has waned at this resistance.
- Neutral, as volume must be higher than average to be significant, regardless of the previous peak.
- Bullish, as the lower volume suggests selling pressure is exhausted and the price will break through.
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