hard · Volume Spread Analysis climaxes-tests-springs-upthrusts
A practitioner is analyzing a 5-minute chart of Ethereum. The funding rate in the perpetual futures market is extremely positive (+0.1% per 8 hours). Price pushes above a 2-hour resistance level on high volume, but the spread is narrow and the close is in the middle of the bar.
What is the most likely outcome?
- The market is absorbing the resistance and will continue its mark-up after a brief rest.
- A shake-out is imminent to clear the high funding before the next leg up.
- The market will likely reverse because professionals are selling into the leveraged long demand.
- The positive funding rate confirms strong professional buying support for the breakout.
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