medium · Volume Spread Analysis supply-demand-smart-money

A practitioner sees 'Falling Pressure'. Bar 1: Wide down, low volume, close low. Bar 2: Narrow down, ultra-low volume, close high. Bar 3: Wide up, average volume, close high.

What does the low volume of Bar 1 indicate about professional participation?

  1. Bar 1 is simply a 'No Demand' signal occurring within an ongoing bear market.
  2. Professionals are absent on the sell-side, making the market vulnerable to a reversal.
  3. The markdown is accelerating because there is now a severe lack of remaining buyers.
  4. Professionals are actively driving the market down on Bar 1 to shake out weak, panicking holders.

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