#以太坊大户持仓变化 Understanding trading volume is the key to grasping the market pulse

Volume analysis is quite interesting. Whether you're focusing on daily, weekly, or hourly charts, the approach remains the same. But the crucial point is—conclusions drawn from different timeframes can only be applied within that specific timeframe.

So, how exactly to interpret it? Let me explain some of the most common volume pattern changes on K-line charts.

**Volume increases with price rises — this is the most basic logic**

Price gradually climbs along with increasing volume, which is a normal market state. This combination of rising volume and rising price generally indicates that the trend will continue upward. It's that straightforward.

**A sharp decline accompanied by huge volume — be cautious**

When the price breaks below a key level (support line, trend line, or moving average), and at the same time, a large volume spike occurs, this is a warning sign—suggesting a potential deep correction. At this point, pay close attention to whether the trend is truly reversing. This is the most critical aspect to watch when analyzing volume.

**Sudden surge in volume often followed by a sharp drop**

Initially, volume slowly increases along with the price, maintaining a steady rhythm. Then suddenly—boom! Volume explodes, and the price skyrockets, making your head spin. It’s exhilarating, but the show isn’t over yet. Immediately after, volume sharply contracts, and the price reverses downward. This usually marks the end of the upward move, with a trend reversal imminent. This pattern is quite common in major cryptocurrencies like $BTC and $ETH.

**Moderate volume expansion signals strong institutional funds**

When volume has been relatively subdued and suddenly starts to increase gradually and steadily, it often indicates genuine capital entering the market. But this isn’t a signal to blindly follow the trend immediately. Typically, after moderate volume increases at the bottom, the price will follow with an upward move, and during volume contractions, the price may experience a moderate pullback. Repeating this process over time accelerates the upward momentum, which is the key insight when analyzing volume.

**Sudden huge volume — analyze the situation carefully**

This is where it gets more complex. If a long upward trend suddenly experiences a massive volume spike, it’s likely that the bulls and bears are increasingly divided. Those holding positions start to sell off, and further upward attempts will face greater resistance. Conversely, if a significant decline occurs after a period of deep correction accompanied by huge volume, it often indicates a final burst of bearish power. The probability of further deep declines diminishes, and the chances for a rebound or reversal increase. Another notable scenario is when the entire market is shouting "short" and sentiment is overwhelmingly bearish, yet the price defies the trend and surges on high volume. This can create a strong visual impact. But don’t be fooled—such moves usually don’t last long and tend to accelerate downward afterward.