Monthly cross star change superimposed on the turning point of daily large volume breakthrough

A monthly cross star in Bitcoin or Ethereum signals market indecision, and when paired with a high-volume daily breakout, it may confirm a strong reversal or trend continuation, especially if volume exceeds 1.5x average and price closes beyond key levels.

Jul 26, 2025 at 10:02 am

Understanding the Monthly Cross Star Pattern in Cryptocurrency Charts

The monthly cross star is a significant candlestick pattern observed in cryptocurrency price charts, particularly when analyzing long-term trends. This pattern forms when the opening and closing prices are nearly identical, creating a small body, while the upper and lower shadows extend significantly in both directions. The presence of this pattern suggests market indecision at a critical juncture, especially when it appears after a prolonged uptrend or downtrend. In the context of major cryptocurrencies like Bitcoin or Ethereum, a monthly cross star often indicates that neither bulls nor bears are able to gain decisive control, potentially setting the stage for a reversal or consolidation phase.

When this pattern emerges, traders pay close attention to the volume and the surrounding price action. A cross star by itself is neutral, but its implications become stronger when combined with other technical signals. For instance, if the cross star appears near a key resistance or support level, it may hint at an impending shift in momentum. The length of the wicks is also crucial—longer shadows suggest that both buying and selling pressures were tested but ultimately rejected, reinforcing the idea of a potential turning point.

Daily Large Volume Breakout: What It Signifies

A daily large volume breakout occurs when the trading volume on a specific day surges significantly above its average, coinciding with a price movement that breaks through a defined support or resistance level. In cryptocurrency markets, which are known for high volatility and liquidity fluctuations, such breakouts are strong indicators of increased market participation and conviction behind the price move. When volume expands during a breakout, it validates the move, reducing the likelihood of a false signal or "fakeout."

To identify a genuine breakout, traders should examine several factors:

• Whether the price closes decisively beyond the previous resistance or support.
• If the volume is at least 1.5 to 2 times higher than the 20-day average volume.
• The presence of follow-through in the subsequent days, where price continues in the breakout direction.
• Confirmation from on-chain metrics, such as increased exchange inflows or outflows, which can support the volume signal.

Platforms like TradingView or CoinGecko allow users to overlay volume indicators directly on price charts, making it easier to spot these surges. Setting up volume alerts through exchange APIs or third-party tools can also help traders react quickly when such events occur.

Superimposing the Monthly Cross Star with Daily Breakout Dynamics

When the monthly cross star coincides with a daily large volume breakout, the confluence of these two signals can mark a pivotal moment in the market structure. The cross star reflects long-term uncertainty, while the breakout suggests short-term resolution in favor of one side—either buyers or sellers. This juxtaposition often leads to accelerated price movements once the breakout is confirmed.

For example, if Bitcoin forms a monthly cross star at $60,000 and, within the same month, experiences a daily candle with volume 200% above average that closes above $62,000, this could indicate that the prior indecision has been resolved to the upside. The breakout candle effectively invalidates the bearish implications of the cross star, transforming it into a potential bullish reversal signal.

Traders can use this alignment to refine their entry and exit strategies:

• Monitor the closing price of the breakout candle to ensure it remains above the key level.
• Use moving averages (e.g., 20-day or 50-day) as dynamic support to confirm trend strength.
• Apply Fibonacci extensions to project potential price targets following the breakout.
• Watch for divergences in RSI or MACD that might warn of overextension despite high volume.

Step-by-Step Guide to Analyzing This Confluence

To effectively analyze the combination of a monthly cross star and a daily large volume breakout, follow these steps:

• Open a monthly chart of the cryptocurrency in question (e.g., BTC/USDT) on a platform like TradingView.
• Identify the most recent completed monthly candle and determine if it exhibits a cross star formation—small body, long upper and lower wicks.
• Switch to the daily chart and locate the trading session where volume spiked significantly.
• Confirm that the high-volume day resulted in a clear breakout above resistance or below support.
• Overlay volume indicators (such as Volume Weighted Average Price or On-Balance Volume) to assess the sustainability of the move.
• Cross-reference with on-chain data using tools like Glassnode or CryptoQuant to see if large transactions or exchange flows align with the breakout.
• Set price alerts at key psychological levels or Fibonacci retracement zones to monitor continuation or reversal.

This method ensures that both macro and micro signals are evaluated in context, reducing the risk of misinterpreting isolated patterns.

Common Misinterpretations and How to Avoid Them

One frequent error is treating the monthly cross star as a reversal signal without confirmation. On its own, it only indicates indecision, not direction. Traders may prematurely open positions expecting a trend change, only to be caught in a continuation move. To avoid this, always wait for price confirmation—such as a breakout candle or a follow-up trend—in the days or weeks following the cross star.

Another pitfall is assuming that high volume alone confirms a breakout. In crypto markets, volume can be manipulated through wash trading or bot activity, especially on smaller exchanges. It is essential to verify volume data across multiple reputable exchanges and prioritize assets with deep liquidity. Additionally, check whether the volume spike occurred during a major news event, such as a regulatory announcement or exchange listing, which could skew normal trading behavior.

Lastly, failing to account for time zone differences can lead to incorrect interpretations. A breakout that appears strong in UTC may look different when viewed from Asia or North American market hours. Always align your analysis with the dominant trading sessions for the asset.

Practical Trading Strategies Based on This Pattern

Traders can design strategies that capitalize on the convergence of the monthly cross star and daily breakout. One approach is the confirmation-based entry:

• Wait for the monthly cross star to form.
• Monitor daily charts for a volume surge that breaks a consolidation range.
• Enter a long position if the breakout is upward and confirmed by two consecutive green candles.
• Place a stop-loss just below the breakout level or the low of the cross star month.
• Use a trailing stop to lock in profits as price advances.

For risk management:

• Allocate no more than 2-3% of portfolio value per trade.
• Avoid leveraging during uncertain macro conditions, even with strong technical signals.
• Diversify across multiple assets to mitigate single-pattern dependency.

Using automated bots on platforms like 3Commas or KuCoin Futures can help execute entries and exits based on predefined volume and price conditions, ensuring discipline in volatile markets.

Frequently Asked Questions

Can a monthly cross star appear in altcoins, and is it as reliable as in Bitcoin?

Yes, the monthly cross star can form in any cryptocurrency, including altcoins. However, its reliability depends on the asset's liquidity and trading history. In high-market-cap altcoins like Solana or Binance Coin, the pattern holds more weight due to deeper order books. In low-volume altcoins, such patterns may be noise due to thin markets.

How do I distinguish between a genuine breakout and a bull trap?

A genuine breakout sustains above the resistance level for multiple sessions with consistent volume. A bull trap often sees price quickly reverse after the initial surge, accompanied by declining volume. Watch for rejection candles like shooting stars or bearish engulfing patterns shortly after the breakout.

Does the position of the cross star within a trend matter?

Absolutely. A cross star at the top of a prolonged rally carries more bearish weight, while one after a deep correction may signal accumulation. Context, including moving averages and trendlines, determines its significance.

Is it necessary to use leverage when trading this pattern?

No, leverage is not required. In fact, given the uncertainty around cross star implications, trading with spot funds and strict risk controls is safer. Leverage amplifies both gains and losses, especially during volatile breakouts.