medium · Volume Spread Analysis effort-vs-result-spread
In the cryptocurrency market, Ethereum (ETH) experiences a sudden 10% drop in price within 15 minutes, triggering a cascade of liquidations in the perpetual futures market.
If the bar closes in the upper third of its range on ultra-high volume, what is the most likely professional maneuver taking place?
- The move indicates a genuine breakdown as the high volume confirms professional selling pressure.
- The ultra-high volume is purely 'wash trading' and should be ignored by the practitioner.
- The market is preparing for a 'mushroom top' distribution phase.
- Professionals are using the panic and liquidations to accumulate supply at bargain prices.
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