Good day my fellow Cryptocurrency chart analyst, today I want to show you a very simple signal that you can use when reading charts.
Before getting there, remember that signals need to be considered in the context of the broader market, just as they need to be supported by other signals.
So you need a mixture of signals together with the bigger picture to increase your chances of reaching the right conclusions, meaning, reading the chart correctly and not being deceived or fooled by fake signals.
Let’s start with the chart:
- Notice in the chart above during the bear market or simply correction, the trading volume was pretty low.
- As the bear market reaches its end, the volume starts to rise and switches from bearish (red) to bullish (green).
That right there is the main signal.
- Another signal that we already looked at multiple times in the past is the fact that volume drops as the trading pair, in this case, BNTUSDT, continues lower, this is a signal of change.
- The initial drop ended in July 2022 but there is a lower low in December. The lower low has less bearish volume than the initial low, in fact, the session/candle ended green. If the bear market were to continue, each new low would need to produce higher volume.
So there you have it.
You have a change in volume behaviour and this is indicative of an upcoming change of trend.
We have other signals to support this one if we were to look into the RSI and moving averages for example or you can clearly see a long-term higher low.
The broader market, the context, we can see many Altcoins going bullish at this point.
We have the volume signal supported by additional signals and thus a higher chance that we will end up being right rather than wrong.
This Altcoin is set to grow.
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