What is Volume spike (red)? — chart signal explained
This signal catches moments when trading activity explodes while the price slips. It uses the average volume of the last 20 bars and its typical variation to decide that this bar's volume is genuinely unusual, then checks that the price direction was down.
When does it fire? — BaroBara criteria
It fires when volume exceeds 2 standard deviations above the 20-bar average and the bar closes at or below the previous bar's close.
How traders usually read it
A drop on heavy volume is often read as sellers meaning business, so many traders take it as a warning that the decline could continue. But after a long slide, others read the same event as capitulation — the last holders giving up — and hope it means a bottom is near.
What to watch out for
The same signal can mark either the start of a decline or its exhaustion, so interpretation flips depending on where it appears. In crypto especially, volume often spikes because leveraged positions are being force-closed in a liquidation cascade, and price direction right after those events tends to be erratic.
What the data actually shows (BTC 1d)
The common reading is a drop — but what actually happened matters more. This signal has fired 19 times on BTC 1d; across the most recent 19, price reached the small target (+0.25%) first about 42% of the time. Widen the target to ±1% and it becomes about 42%. A historical probability, not a guaranteed direction — and it shifts with market regime.
Odds and expected value — with symmetric target and stop (±)
Exactly the barobara framing: which side got hit first, +X% or −X%. Target and stop are set to the same %, and the win rate is how often the upside (+X%) was reached first.
| Target = stop (±) | Win rate (+ first) | EV (before fees) |
|---|---|---|
| ±0.25% | 42% | -0.04% |
| ±0.5% | 47% | -0.03% |
| ±0.75% | 47% | -0.05% |
| ±1% | 42% | -0.16% |
| ±1.5% | 32% | -0.54% |
| ±2% | 32% | -0.72% |
Broken down by market regime
⚠️ This table uses a different basis than the symmetric (±) table above — a small +0.25% target with a wide −5.0% stop (fees included). The small target makes the win rate look high while EV is often negative — exactly what signal groups hide. And the same signal behaves differently across regimes.
| Regime | Win rate (+0.25% target) | EV (−5.0% stop) | Sample |
|---|---|---|---|
| Bear market | 89% | -0.41% | N=9 |
Recent occurrences
How far price actually moved the last few times this signal fired (MFE = maximum favorable excursion).
| Date | MFE | Result |
|---|---|---|
| 2025-02-24 | 11.47% | ✅ hit 🔴 stopped |
| 2025-04-02 | 4.41% | ✅ hit 🔴 stopped |
| 2025-06-13 | 4.46% | ✅ hit 🔴 stopped |
| 2025-08-14 | 8.72% | ✅ hit 🔴 stopped |
| 2025-10-10 | 8.41% | ✅ hit 🔴 stopped |
| 2025-11-03 | 15.07% | ✅ hit |
| 2026-01-31 | 36.07% | ✅ hit |
| 2026-02-05 | 0.0% | — 🔴 stopped |
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