What Is a Volume Dry-Up?
A Volume Dry-Up occurs when trading activity decreases significantly compared with recent periods.
It can appear during:
- Market consolidation.
- Quiet pullbacks.
- Pre-breakout compression.
- Reduced participation before major events.
A volume dry-up may indicate a temporary balance between buyers and sellers.
But low volume does not guarantee that an expansion is coming.
Watch for the return of participation and how price reacts to it.
Do you use volume contraction to identify consolidation?
