Top Tips: Analysis of Quantity Price Relationship, Accurately Following Market Makers to Buy Bottom and Escape Top Common patterns of price volume relationships in the market: Shrinking volume and rising continuously: When the trading volume decreases, the divergence is small, and the market is prone to continue rising in consensus. Large volume decline, not deep decline: Although panic selling brings a decline, the market can often quickly recover due to increased divergence. Large volume increase, not high rise: The divergence is too great, and the upward trend of the market is difficult to sustain. Shrinking and declining, bottomless: A non divergent decline may continue for a period of time until a "sudden change" occurs. The essence of trading volume: Divergence is the driving force behind trading Firstly, we need to understand a concept: trading volume=market divergence. An increase in trading volume means that the divergence of opinions between buyers and sellers intensifies, with a large number of people willing to sell and a large number of people willing to buy. On the contrary, a decrease in trading volume indicates a strong market consensus and a reduction in divergence. In other words, there can be no trading without disagreements, and market volatility is essentially a game of disagreement and consensus. That's also why analyzing changes in trading volume can help us predict the next direction of the market. one ️⃣ Here are four typical price quantity phenomena: 1/Price and Quantity Rise Together: The market rises amidst divergence As the price of the currency rises, the trading volume also continues to increase, indicating that the market is moving forward in a "tug of war". Interpretation: Although the upward momentum is strong, this is a "consumption driven upward trend". Once the trading volume cannot continue to increase, the upward trend may come to an end. Operational advice: When trading volume begins to decline, be alert to the possibility of a trend reversal. 2/Rising+Shrinking: The market rises in consensus The price of the currency has risen, but the trading volume has remained stable or even decreased, indicating that the market divergence is small and the business trend is stable. Interpretation: This kind of rise is a "low consumption type" and can often last for a long time. Operation suggestion: Follow the trend and hold positions. Do not easily leave unless there is a significant volume turning signal. 3/Price decline and volume increase: The market falls amidst divergence At the same time as the coin price fell, the trading volume significantly increased, indicating a sharp divergence of market sentiment and an increase in panic. Interpretation: This is a "consumption type decline" that is usually difficult to sustain. Once the trading volume shrinks and the stock price rebounds, it can indicate that the decline is nearing its end. Operation suggestion: Stay calm and patiently wait for the signal of volume reduction rebound. 4/Decline+Volume contraction: The market falls in consensus The price of the coin has fallen, but the trading volume has gradually decreased, indicating that the market generally agrees that the price will continue to decline. Interpretation: This is a "low consumption type", and the decline may last for a long time until a sudden change occurs (a large increase in volume). Operation suggestion: Do not easily copy the bottom, patiently wait for obvious changes in market sentiment. two ️⃣ The 'mutation' signal: high trading volume is the alarm of the market What is a mutation? When a trend has been running for a long time and the trading volume suddenly increases significantly on a certain day, whether the price rises or falls on that day, it means that the market has undergone important changes. Volume increase: It may be a breakthrough signal, but it could also be a false breakthrough, and it is necessary to observe whether the subsequent trend is stable. Large volume decline: It may be the appearance of a temporary low point, but we still need to be vigilant about further deterioration of market sentiment. How to utilize mutations? The continuously increasing trading volume can be used to calculate the average cost line of the market, providing important reference for determining whether the trend can continue. three ️⃣ How to utilize the "price volume relationship" in investment? Rising depends on shrinking volume, while a pullback depends on increasing volume: A low consumption rise is more sustainable, and a large sell-off may mean that the bottom is not far away. Pay attention to the "mutation" signal: drastic changes in trading volume are often a precursor to changes in market direction Respect market sentiment: Trading volume is a direct reflection of the power of long and short positions in the market. Only by learning to understand the relationship between volume and price can you more accurately seize buying and selling opportunities four ️⃣ The performance of bull and bear markets in terms of quantity price relationship The volume price relationship in the bull bear market exhibits completely different characteristics, which can provide key clues for investors to judge the stage of the market Volume price performance in a bull market Bottom start phase: When the price has just started from the bottom, the long period of bottoming out is still ongoing. At this point, many coin holders remain pessimistic about the future due to the shadow of the previous bear market. However, some funds with foresight have already recognized the opportunity and started to enter the market to build positions, leading to market divergence. This divergence is reflected in trading volume, which is gradually increasing in volume, commonly manifested as a sideways or small increase in volume Upward trend stage: As prices enter a clear upward trend, the differentiation of investor camps intensifies. On the one hand, some people are starting to profit and eager to cash out; On the other hand, some investors have cut their losses and left the market, with both selling pressure and taking over, and the divergence has become increasingly significant. During this process, the trading volume continued to increase, showing a trend of rising volume. Top Stage: When the price approaches the top, the dispute between long and short sides reaches a white hot point. At this moment, the trading volume is huge, but the price of the coin is difficult to rise. Behind this is the spreading panic of the coin holders, who sell the value coins at all costs. As long as someone takes over the order, they will sell it. Even if the buyer's strength is fully engaged, it is difficult to push the coin price up. It usually presents a state of stagnation or decline due to excessive volume. Volume price performance in bear markets Initial stage of top decline: At the time when the coin price began to decline from the top, many high priced funds had not yet made a profit and were unwilling to sell easily; Some investors, although already suffering losses, still hold onto their luck and are unwilling to cut their losses, resulting in a relatively light market selling pressure. At the same time, subsequent practitioners noticed a downward trend and stopped to observe, unwilling to enter the market to take over. This supply-demand imbalance has led to a state of contraction and decline in the market. Downward channel stage: When the price of the currency clearly enters a downward channel, the bear market signal is already clear, and experienced practitioners are even more determined to hold onto the currency and wait. The funds trapped above were tortured to the point of losing patience during the long process of decline, and ultimately gave up in despair, but could not find a successor, causing the market to fall into a situation of shrinking volume and plummeting. During the cryptocurrency market disaster, the daily endless bearish scenes are unforgettable, fully demonstrating the cruelty of the bear market. Shortfall stage: After a long and significant decline, the coin price has entered a relatively low price range. At this point, some radical left-wing practitioners began to enter the game, and the trapped funds finally hoped to receive the buying power. At first, the price of the coin will decrease in volume, but as the downward momentum gradually releases, the trading volume gradually shrinks, opening a new cycle of volume reduction and bottoming out, accumulating strength for the next round of the market. Understanding the volume price relationship in different stages of the bull and bear market can help us better grasp the market rhythm.