medium · Volume Spread Analysis wyckoff-phases-schematics
A cryptocurrency trader sees Bitcoin drop 15% in one hour, hitting a prior support level. The volume is 'Ultra-High' and the price closes in the middle of the hourly range. Funding rates in futures are at extreme negative levels.
What is the diagnosis?
- Climactic Action/Shake-Out; the negative funding indicates a crowded short position ready to be squeezed.
- Genuine markdown; the ultra-high volume simply confirms aggressive professional selling here.
- A UTAD maneuver, marking the top of a prior distribution range in order to trap late-arriving breakout buyers.
- No selling pressure exists here; volume readings are irrelevant in crypto due to rampant wash trading activity.
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