BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
Here's some insight into Volume Structure Analysis

Steps:

1. outline wave structures based on volume
2. determine whether the next wave structure is a continuation or reversal

Rules:
1. start from the local top/bottom and look only at candles in the direction of a trend, ignore candles in the opposite direction. On a chart price is in down trend, so compare only red candles
2. if cur candle's volume < prev candle's volume of the same color => same structure
3. if cur candle's volume > prev candle's volume of the same color AND cur candle's volume < first candle's volume in the cur structure => new subwave in the same structure, continuation
4. if cur candle's volume > first candle's volume in the cur structure => new structure, continuation
5. treat doji /small volume candle at the end of a structure as a pause (both continuation or reversal are possible). Confirm with the next candle
6. Within a structure/subwave volume can initially rise but then decline with each new candle as supply decreases until a new reversal/correction structure emerges.
7. Now compare volumes of last candles of the cur structure with prev structure. Last candle in a subwave/structure shows how much strength the trend still has.
8. If cur(last) candle's volume in the cur structure > last candle's volume in the prev structure => trend continuation (possibly after correction), there are still lots of sellers/buyers and there will be another leg/wave structure in the direction of a trend
9. If cur(last) candle's volume in the cur structure < last candle's volume in the prev structure => end of trend, there's no more supply/demand left, expect reversal or a more substantial correction
10. exception - triangular structures with consolidating volume . volume rules don't apply, breakout happens regardless

On a chart:

1. vol 2 < vol 1 AND volume of the prev red candle (last candle in subwave 1) < vol 2 (first candle in subwave 2) => 1 and 2 are subwaves in the same structure 1, candle 2 starts subwave 2
in subwave 1 volume declines with each new candle
in subwave 2 volume increases with each new candle - continuation, another subwave/structure/leg down is likely
vol of the last candle in subwave 2 > vol of the last candle in subwave 1 => continuation, another structure/leg down is likely
last candle in subwave 2 is a small doji - confirm dir with the next candle (in this case correction up before continuation of the down trend)

2. vol 3 > vol 1 => candle 3 starts a new structure 2 instead of a subwave
in structure 2 (subwave 1) volume declines with each new candle so we may not go past the low wick in structure 1 - expect a correction up
vol of the last candle in structure 2 subwave 1 > vol of the last candle in the prev structure 1 => continuation, another subwave/structure/leg down is likely
in fact volume of each candle in structure 2 subwave 1 > vol of the last candle in the prev structure 1 => continuation, another subwave/structure/leg down is likely

3. vol 4 < vol 3 AND vol 4 < volume of the last candle in structure 2 subwave 1 => candle 4 is the first candle in subwave 2 in the same structure 2
since vol 4 < volume of the last candle in structure 2 subwave 1 we could even say that it's a continuation of the same subwave
vol of the last candle in structure 2 subwave 2 > vol of the last candle in the prev structure 1 => continuation, another subwave/structure/leg down is likely
we break the structure 1 low, however last 2 candles in structure 2 have small sizes and volume starts to decline - maybe pause for correction

4. vol 5 > vol 4 AND vol 5 > vol 3 - new structure 3
structure 3 is a triangle. In a triangle volume is always decreasing and breakout still occurs in any dir - can't predict using volume structure

5. vol 6 < vol 5 - new subwave
in structure 3 volume declines with each new red candle
last red candle in a triangle is a doji and has 4.4 bln vol - we can call it a pause

6. vol 7 > vol of the last red candle in a triangle AND vol 7 < vol 6 < vol 5 => we can either call it the same structure or a new structure 4
in this structure volume increases with each candle
subwave 1 candle ends with 26 bln vol candle > last candle volumes in all prev structures => continuation, another subwave/structure/leg down is likely
but this 26 bln vol candle < vol of last candle of subwave 1 of the triangle structure 3 27.6 bln => expect a small correction up
subwave 1 hits support level - expect a small correction up
conclusion: expect a correction then a new move down

next candle's vol is 14.25 bln > first candle vol 6.7 bln => start of subwave 2, continuation, another subwave/structure/leg down is likely
in subwave 2 volume declines with each new candle - trend loses momentum, possible correction on each new candle, maybe one more candle down
ATL last candle's vol in structure 4 subwave 2 is 9 bln < last candle volumes in structures 1 and 2 => reversal
on a daily last candle is a doji - pause, confirm with the next candle - correction up

7. treat candle 8 in the context of reversal.
on one hand it's a new structure since vol 8 > vol 7, on the other vol 8 < last candle's vol in structure 4 9 bln so it should be it's subwave
it can't be both, so it must be a correction in the direction of a new trend
volume declines with each new candle, last candle is small - confirm with the next candle (up trend)

8. vol 9 > vol 1 AND vol 9 > vol 5 of the prev structure - starts new structure 6 as part of megastructure 2, we suspect down trend at this point
in this structure volume declines with each candle

9. vol 10 < vol 9 - new subwave in the same structure or can be called structure 7 => triangle, volume rules don't apply, breakout happens regardless
volume declines with each candle in each subwave until breakout to the downside
breakout candle has 25 bln vol
last candle in structure 7 has 14.7 bln vol and is small - confirm direction with the next candle (correction up)
last candle's vol 14.7 bln < vol of last candle of subwave 1 of the triangle structure 6 => expect correction up
last candle's vol 14.7 bln > ATL vol 9 bln of last candle in structure 3 (megastructure 1) of prev down trend wave => expect continuation of down trend
conclusion: expect a correction up then a new leg down

10. vol 11 < vol 10 < vol 9 so it can be called the same structure 6
vol 11 > last candle's vol 14.7 bln so it can also be a new substructure
so, from the point of volume candles 9-10-11 are in the same structure
in this new substructure volume declines with each new red candle, increases to 16.5 bln on the last candle
last candle's vol 16.5 bln > 14.7 bln vol of last candle of prev structure 7 => continuation, another subwave/structure/leg down is likely
we've broken the wick of the prev structure 7 down => continuation
last candle's vol 16.5 bln > ATL vol 9 bln of last candle in structure 3 (megastructure 1) of prev down trend wave => expect continuation of down trend


P.S. Chewbacca is Alive.

Comment: screen for reference:
Comment: blue candles - are last candles of each subwave structure that I'm talking about.
If we close the week above 7300 low wick/support level expect a small correction up then another move down

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