TL;DR $ETH volume might be breaking out after a collapse, but this probably signals another downtrend. This is not financial advice.

One of the more commonly heard phrases in trading is “price follows volume”, and recently volume on $ETH has collapsed and is now trying to break out. Unfortunately, in the near term this looks very bearish for $ETH. Note on the chart that the previous volume breakout after a period of sideways movement terminated in a sharp move to the downside.

ETH 10.08.18 01

In my opinion, this is part of the bottoming process. If you look at a much larger time frame, while total volume has been increasing during this period, OBV (“smart money volume”) has contradicted this.

ETH 10.08.18 02

To me, this looks and feels like retail holders of $ETH capitulating as traders push the price around, hitting pain points and causing retail bulls to capitulate. Another leg down looks likely.

While price will most likely eventually follow this increase in volume, in my opinion it will happen at later date and from a lower low. We still need a “climax selling event” to mark a bottom here, as bottoms are usually “events”, but tops are typically “built”.

This is not financial or trading advice and is represented as opinion only. The author may or may not be long, or short, any financial instruments mentioned here. Always consult with your industry or government approved financial advisor before making any investment decisions.

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