Is the huge volume on the second day of the daily limit a shipment? How to judge the main intention?

A surge in volume after a daily limit breakout may signal institutional activity or profit-taking, requiring careful analysis of price action and on-chain data to distinguish genuine momentum from potential shipment.

Jun 26, 2025 at 02:36 am

Understanding Daily Limit and Its Implications

In the world of cryptocurrency trading, terms like daily limit play a crucial role in shaping market behavior. A daily limit refers to the maximum price fluctuation allowed for a particular digital asset within a single trading session. When this cap is reached, further trades are restricted until the next session begins. This mechanism is often seen in exchanges that aim to prevent extreme volatility or manipulation.

The phenomenon of hitting a daily limit can cause significant shifts in trader psychology and market sentiment. Especially when the price hits the upper bound, it may indicate strong buying pressure. However, the second day's volume becomes critical in determining whether this rally is sustainable or merely a trap set by large players.

Key Insight:

The second day’s trading volume after a daily limit hit is often scrutinized for signs of institutional accumulation or distribution.

---

Interpreting High Volume on the Second Day

When a cryptocurrency hits its daily limit, especially upward, traders expect continued momentum. If the following day witnesses huge trading volume, it raises questions about the true intentions behind such activity. High volume could signal either genuine interest from major investors or a strategic move to offload holdings.

One way to interpret this is by analyzing how the price behaves alongside the volume. If prices continue to rise with sustained high volume, it might suggest ongoing strength. Conversely, if the price stagnates or drops despite high volume, it could point to profit-taking or selling pressure.

• Check for divergence between price and volume
• Analyze candlestick patterns post-daily limit
• Look at order book depth and liquidity levels

Important Note:

Large volumes without corresponding price movement are often considered red flags indicating possible shipment or dumping.

---

Recognizing Signs of Shipment After a Daily Limit

Shipment, in crypto jargon, refers to the act of large holders (whales) selling off their positions to smaller retail investors. It often occurs after a significant price pump, where the big players take advantage of the hype to exit their positions.

After a daily limit is hit, especially if followed by an unusually large volume, one must look closely at several technical indicators:

• Volume spikes significantly higher than average
• Price closes near the low of the candle despite opening high
• High sell orders visible on the order book
• Market makers start showing aggressive bid-ask spreads

Caution:

Sudden reversal after a strong bullish move often indicates that the main players have already exited.

---

Evaluating Mainstream Intentions Through On-Chain Data

To judge the intention of major players, traders increasingly rely on on-chain analytics. Tools like Glassnode, Santiment, or Chainalysis offer insights into wallet movements, exchange inflows/outflows, and accumulation/distribution trends.

Some key metrics to monitor include:

• Exchange inflow and outflow volumes
• Large transaction counts
• Whale wallet activity
• Holdings change among long-term vs short-term investors

Data Point:

A surge in exchange inflows right after a daily limit breakout often precedes a selloff or correction.

---

Practical Steps to Analyze Post-Daily Limit Behavior

For traders looking to assess whether a daily limit breakout followed by heavy volume is legitimate or not, here is a step-by-step approach:

• Compare the current volume with the average 10-day volume
• Observe how the price reacts to the volume — is it rising or falling?
• Use tools like OBV (On-Balance Volume) to confirm trend strength
• Watch for wicks on the candlesticks — long upper shadows may suggest rejection
• Track social media and news for any sudden hype or FOMO-driven buying

Actionable Tip:

Combine volume analysis with support/resistance levels to filter false breakouts.

---

Frequently Asked Questions

Q: What does it mean when a cryptocurrency hits its daily limit?

A: Hitting the daily limit means the price has moved up or down by the maximum allowed percentage within a single trading session, often reflecting strong buying or selling pressure.

Q: Can high volume after a daily limit still be bullish?

A: Yes, if the price continues to rise or consolidates above key levels with sustained volume, it can indicate healthy accumulation rather than shipment.

Q: How do I differentiate between real volume and fake volume on exchanges?

A: Fake volume can be spotted by checking trade data consistency across multiple platforms, using blockchain explorers, and monitoring for wash trading patterns.

Q: Is it safe to buy after a daily limit breakout?

A: Entering immediately after a daily limit breakout carries risk unless confirmed by other signals like strong support levels, positive on-chain flow, and absence of whale dumps.