First, sharp rise followed by gradual decline: When the price of digital currency rises rapidly and then begins to decline slowly, it is highly likely that market makers are secretly accumulating positions in preparation for a subsequent price increase. One should not be misled by the upward trend, as the market makers have not completed their offloading operations, and a significant upward trend may follow.
Second, gradual rise after a sharp price drop: When the price of digital currency rapidly declines, a very slow rebound generally indicates that market makers are quietly offloading their holdings, and the market may be heading towards the edge of a bear market. It is necessary to remain vigilant and exit the market as soon as possible to avoid being trapped.
Third, high-level continuous rise and surge in trading volume: When the price of digital currency continues to rise, if the trading volume keeps expanding, there is no need to rush to sell, as this may indicate that the trend has not yet ended, and a subsequent upward trend is expected. Conversely, if the trading volume begins to decrease, it indicates insufficient upward momentum, and the optimistic sentiment in the market is nearing its end, thus one should consider exiting the market.
Fourth, increased volume at the bottom: When the price of digital currency is oscillating in a bottom range, if the trading volume suddenly increases, one should not rush to enter trades, as this may just be a brief rebound during a downward trend, which is a tactic used by market makers to induce retail investors to buy. Only when trading volume steadily increases is it a reliable signal confirming a trend reversal, at which point one can consider entering the market for investment.
Fifth, trading volume reflects market sentiment: Investing in digital currency is essentially a game of market psychology, and trading volume is a direct reflection of market sentiment. The fluctuations in digital currency prices highlight changes in market sentiment, while trading volume serves as a thermometer for market attitude. Operating based on changes in trading volume can help investors more accurately predict market trends, giving them more confidence and certainty in market transactions.
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