📈 Introduction
In crypto trading, candlestick patterns help you see market psychology — but volume tells you how much conviction is behind those moves.
A bullish candle may look promising, but without strong volume, it could be a trap. Likewise, a reversal candle backed by heavy volume can signal a true shift in momentum.
In this article, you’ll learn:
- Why volume matters
- How volume confirms or weakens candle signals
- The best volume-candle combinations
- Mistakes to avoid when trading volume
🧠 What Is Volume in Crypto?
Volume is the total number of units (coins or tokens) traded over a specific time period.
For example:
- On a 1-hour chart, the volume shows how many BTC were traded in that hour.
- Volume is usually shown as a bar chart at the bottom of a candlestick chart.
The higher the volume, the more liquidity and participation — meaning more traders were involved in that price movement.
🔍 Why Volume Validates Candlestick Patterns
Candlestick patterns are based on price action, but price alone can be misleading.
Adding volume context answers this question:
“Was this move supported by the crowd, or was it just noise?”
| Candle Type | High Volume Means... | Low Volume Means... |
|---|---|---|
| Bullish Engulfing | Strong buying reversal; bulls stepping in | Weak bounce; might fade |
| Hammer | Bottom likely in place; buyers defended lows | May be a fakeout |
| Marubozu (green/red) | Conviction candle; momentum continues | Suspect move; no crowd support |
| Doji | Uncertainty with indecisiveness (neutral) | Choppy market or no interest |
| Shooting Star | Powerful top if volume spikes on upper wick | Weak signal if on low volume |
📘 Real-World Example
Let’s say Ethereum forms a bullish hammer on the 4-hour chart.
If the volume bar is double the average, it confirms that buyers stepped in hard.
If volume is low, it might just be random fluctuation — wait for confirmation.
Another example:
A bearish engulfing appears after a pump on Solana — if volume spikes on the red candle, the dump is likely to continue.
📊 Candle + Volume Scenarios You Should Watch
✅ 1. Bullish Engulfing + Rising Volume
Great signal for trend reversals at key support
Especially effective if RSI was oversold
✅ 2. Breakout Candle + Volume Spike
Watch for Marubozu or strong green candle breaking above resistance
Volume spike confirms real breakout, not fakeout
✅ 3. Hammer with High Volume
Buyer rejection of lows with commitment
High probability of bottom formation
✅ 4. Shooting Star with Volume Climax
Price spiked up, then dumped — and the dump had volume
Signals exhaustion or even market top
❌ Avoid These Common Mistakes
- Trading candles without looking at volume: Candles tell half the story. Volume confirms who's behind the move.
- Trusting low-volume breakouts: If a breakout above resistance has weak volume, it’s likely to fail or fake out.
- Confusing high volume on doji candles: High volume + doji = battle zone. Don’t trade until next candle shows direction.
📈 Pro Tips
- Use Volume Moving Average (VMA) to spot meaningful spikes (e.g., 20-period VMA)
- Watch volume divergence: if price is rising but volume is falling, trend may end
- Combine volume with key levels for breakout/breakdown confirmation
✅ Conclusion
Volume adds weight to candlestick signals. It tells you whether the market truly agrees with what the candle suggests.
Next time you see a reversal or breakout:
- Look down at the volume bar
- Ask: Was this candle backed by real money?
If yes, you’ve got a powerful signal. If no, stay cautious.