Market Sentiment Analysis Using Volume: How to Avoid Shark Traps and Trade More Safely in Crypto

Many newcomers to the crypto market only focus on looking at the price increase or decrease on candles, forgetting an important thing: candles can be “drawn,” but trading volume cannot lie. Price is just the final result, while volume reveals the true emotions and intentions of large money flows. 👉 Below is a system of thinking and practical experience distilled from the market, helping you distinguish accumulation – distribution – bottom formation – selling off, so you don’t become someone “holding the wind at the peak.”

1. Slow Rise, Gentle Decline, Contracting Volume: Silent Signs of Accumulation One of the most beautiful signals of the market is: Price gradually rising, not sharplyVolume increasing slightly, steadily, not explosivelyDuring corrections, volume decreases significantlyTurnover rate ( remains around 10–20% This indicates that large funds are controlling their accumulation, not wanting to push the price too quickly to avoid attracting attention. This is often a preparatory phase for the next upward move. 👉 Conversely, if you see: Price surging suddenlyFollowed by a long red candle with extremely high volumeTurnover exceeds 30% Then don’t comfort yourself with “selling off” – this is very often distribution, and the right action is to withdraw immediately, without hesitation.
2. Flash Crash Is Not an Opportunity: Rapid Drop – Slow Rebound Means Selling Many people make the same mistake: “The price drops sharply then bounces back, missing out is a loss.” In reality, very fast declines + slow recoveries often reflect: Whales manipulating the price to create panicThen gently pulling back with small capital to lure new investorsWhen buying pressure appears, they continue selling This is a selling pattern during recovery, not a bottom formation. 📌 Safety principles: After a sharp crash, wait at least 3 sideways candlesVolume must stabilizeSupport levels are maintained If these conditions are not met, absolutely do not “catch falling knives.”
3. Sideways Low Volume at High Levels: Not Accumulation, But Warning A very dangerous saying in crypto: “Sideways at the top is accumulation for further increase.” Market reality shows: If the price is at a high levelVolume gradually dries upTurnover below 5%Lasts more than 2 weeks 👉 This is often a sign that large funds are no longer interested in pushing the price, waiting for others to buy back. When liquidity withdraws, the fall is usually very quick and deep. Sideways at the bottom may be accumulation. Sideways at the top with low volume is mostly silence before the storm.
4. True Bottom Always Needs Two Confirmations, Never Just One Jump Many see a strong rally with high volume and immediately conclude: “The bottom is formed!” The truth is: One rally with volume is not enough to confirm a bottom A reliable bottom pattern usually requires: A deep correction, at least 40% or moreA strong initial rally )probing volume(Followed by 10–15 days of sideways movement with low volumeFinally, a second volume explosion breaking the accumulation zone This is when large funds confirm: “Enough supply, we can push.”
5. Understanding Volume Is Reading the Market’s Heartbeat Remember the basic language of volume: Low volume: The market is cold, both whales and retail traders are on the sidelines → limited tradingModerate volume: Funds are quietly entering → a phase to watch closelyHuge volume spike )turnover > 50%(:Either extreme euphoriaOr extreme panic → In both cases, prioritize reducing positions, do not chase Volume is the heartbeat of the market. Irregular heartbeat – stagnant. Stable heartbeat – act accordingly.
6. New Psychology Is the Final Weapon for Those Who Make Money Many people: Learn all indicatorsMaster patterns But still suffer losses The problem lies in psychology. Three survival principles: Dare to stay out: No good setups, no trading. Missing good opportunities is better than entering bad onesNo greed: Take profits when reaching )30–50%( expectations. No one sells exactly at the topNo fear: When bottom signals are clear, the more panicked the market, the calmer you must be and follow your plan Consistent profit is not about guessing right every time, but knowing when to wait and when to act. Conclusion In the crypto market: Prices can deceive youNews can be noisyBut volume always tells the truth If you learn to read volume, you will no longer: Get excited buying at the top Panic selling at the bottom Get swept away by crowd emotions 👉 Trading doesn’t need to be fast, just correct and survive long enough.