Recently, a certain coin surged by 41% in one day, with screenshots of WeChat groups and Moments flying everywhere, basically the entire community shouting "Chong Chong Chong." But habitually, I pulled up the trading volume data and took a deep breath — the price was rising so aggressively, yet the trading volume had shrunk by 74.6%.

This kind of strange phenomenon has been seen many times before. The closer the market is to a transition from a bear to a bull, the more likely such "volume-price divergence" situations are to occur. And each time, the ending is pretty much the same — someone makes quick money first, then the bag-holder gets deeply trapped.

**Trading volume is the true reflection of the market**

After so many years of trading, one principle I trust the most is: trading volume doesn't lie, but prices often do.

It's not hard to make the price go up; just throw some money in and buy. But to sustain the trading volume, real cash participation is needed. A few large orders can move the price, but they can't create genuine trading enthusiasm.

Trading volume essentially is a barometer of market activity. It reflects how many people are truly trading in this market. Price increases without volume support are, in essence, false fire — looking lively but actually fragile.

The current situation is very typical: the price soared by 41%, but at the same time, trading volume was retreating. This can only mean one thing — this wave of rise isn't the result of broad market participation, but rather internal funds flipping hands, with a clear goal — to create FOMO through rapid price increases, luring retail investors in to catch the last wave.

**History repeats, but the forms vary**

Looking back at the history of the crypto market, stories of price surges without volume have played out countless times. Some coins have never recovered from their rise, some rebounded for a while, but there are hardly any true reversals.

The problem is, most people only focus on the price, ignoring the deeper signal of trading volume. When volume continues to shrink, it indicates declining market enthusiasm. At this point, no matter how much the price rises, it might just be a fleeting glow.

This doesn't mean you can't play; you just need to be clear about what you're playing. If you're aiming for ultra-short-term quick profits, set a stop-loss. If you're looking to bottom-fish for long-term holding, wait until the trading volume gently expands and the price steadily rises — that’s the real signal for safe building positions.

Right now, this situation looks more like a carefully crafted false prosperity. Being cautious is never wrong.