Back to Glossary
Technical AnalysisV
Volume Spike Reversal
A reversal pattern marked by a sudden, dramatic increase in volume that interrupts the prevailing trend and signals a potential change in direction. The spike typically occurs on a single bar or small cluster of bars and represents a rapid influx of opposing market participants overwhelming the current trend. Volume spike reversals are often triggered by news events, earnings surprises, or technical breakdowns at key levels.
Example
“The currency pair was in a steady downtrend until a volume spike reversal on the 4-hour chart saw buying volume surge to ten times normal levels, launching a 200-pip recovery.”