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Volume dry-up

A stretch of unusually low volume during a consolidation, read as sellers having finished rather than as a lack of interest.

Low volume near the end of a base is treated as constructive: if almost nobody is willing to sell at these prices, relatively modest demand can move price. It is the volume half of the volatility-contraction-pattern.

The classic sequence is heavy volume on the decline into a base, progressively lighter volume on each test of the low, and then expanding volume on the breakout. That sequence is checkable and does not require interpreting shapes.

The counter-argument is that low volume can equally mean an instrument has simply been abandoned, and plenty of quiet bases go quieter still. The dry-up only becomes meaningful once expansion follows, which means it is confirmation after the fact.

Related: volatility-contraction-pattern, consolidation, volume-climax, relative-volume, accumulation

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