Does the morning cross star need to be confirmed by large volume?

The morning cross star is a bullish reversal pattern in crypto trading, confirmed by high volume on the third green candle, signaling strong buying pressure and potential trend change.

Jul 26, 2025 at 03:22 am

Understanding the Morning Cross Star Pattern

The morning cross star is a candlestick pattern often observed in cryptocurrency price charts, typically signaling a potential reversal from a downtrend to an uptrend. This pattern consists of three candles: a long red (bearish) candle, followed by a doji or a small-bodied candle that gaps down, and then a long green (bullish) candle that closes within the body of the first red candle. The doji in the middle represents market indecision, suggesting that selling pressure may be weakening.

In the context of cryptocurrency trading, where volatility is high and price movements can be abrupt, identifying such reversal patterns becomes crucial for traders seeking entry points. The appearance of the morning cross star alone does not guarantee a reversal. Traders often seek confirmation signals to validate the pattern before making trading decisions. One of the most debated aspects of this confirmation is whether large trading volume is necessary.

The Role of Volume in Candlestick Pattern Confirmation

Volume plays a critical role in validating the strength of any price movement in the cryptocurrency market. When analyzing the morning cross star, the third candle—the bullish one—is where volume becomes particularly important. A surge in volume during the formation of this green candle suggests strong buying interest, which increases the likelihood that the reversal is genuine.

• High volume on the third candle indicates that institutional or aggressive retail traders are entering the market.
• Low volume, even with a green close, may suggest a lack of conviction and could result in a false signal.
• Volume on the first bearish candle is typically high, reflecting continued selling pressure.
• The doji candle often has lower volume, showing reduced momentum and a balance between buyers and sellers.

Therefore, while the morning cross star can appear without high volume, the presence of increased volume on the confirmation candle significantly strengthens the reliability of the pattern. In fast-moving crypto markets like Bitcoin or Ethereum, volume spikes are often seen as early indicators of sentiment shifts.

How to Analyze Volume During the Morning Cross Star Formation

To properly assess whether volume confirms the morning cross star, traders must examine volume data across all three candles. Most cryptocurrency trading platforms, such as Binance, Bybit, or TradingView, provide volume bars beneath price charts. Here’s how to analyze them:

• Locate the three-candle sequence on your chart using a daily or 4-hour timeframe.
• Observe the volume bar under the first red candle—this should ideally be high, confirming active selling.
• Check the volume under the doji candle—it should be lower, indicating indecision.
• Most importantly, examine the volume under the third green candle—this should show a noticeable increase compared to the previous two.

For example, if the volume on the third candle is at least 1.5 times higher than the average of the prior five candles, it can be considered strong confirmation. Traders can use volume indicators like Volume Weighted Average Price (VWAP) or On-Balance Volume (OBV) to further validate the trend reversal.

Alternative Confirmation Methods Beyond Volume

While volume is a key factor, it is not the only method to confirm a morning cross star. In markets where volume data may be less reliable—such as smaller altcoins with fragmented liquidity—traders rely on additional technical tools:

• Support levels: If the pattern forms near a known support zone, such as a previous swing low or Fibonacci level, the reversal signal gains credibility.
• Moving averages: A bounce from the 50-day or 200-day moving average coinciding with the pattern increases its validity.
• RSI divergence: A bullish divergence on the Relative Strength Index (RSI), where price makes a lower low but RSI makes a higher low, supports the reversal.
• MACD crossover: A MACD line crossing above the signal line during or after the third candle adds confirmation.

These tools, when combined with the morning cross star, create a confluence of signals that can compensate for ambiguous volume data, especially in low-cap cryptocurrencies where volume manipulation is more common.

Step-by-Step Guide to Trade the Morning Cross Star with Volume Confirmation

To trade the morning cross star effectively in the cryptocurrency market, follow this detailed procedure:

• Select a cryptocurrency pair with sufficient liquidity, such as BTC/USDT or ETH/USDT, to ensure reliable volume data.
• Set your chart to a 4-hour or daily timeframe to avoid noise from lower timeframes.
• Identify the three-candle pattern: a long red candle, a gapped-down doji, and a long green candle closing above the midpoint of the first candle.
• Check volume on the third candle: use the volume histogram to confirm it is significantly higher than the prior two candles.
• Wait for the third candle to close before taking any action to avoid premature entries.
• Place a buy order at the close of the third candle or at the opening of the next candle.
• Set a stop-loss just below the low of the doji candle to manage risk.
• Set a take-profit level at the nearest resistance zone or use a risk-reward ratio of at least 1:2.

Using a trading bot or alert system on platforms like TradingView can help automate the detection of this pattern and volume surge, ensuring timely execution.

Frequently Asked Questions

Can the morning cross star occur without a gap down?

Yes, in cryptocurrency markets, gaps are less common due to 24/7 trading. The pattern can still be valid if the middle candle is a doji or small-bodied candle that shows indecision, even without a visible gap. The key is the shift in momentum, not the physical gap.

Is the morning cross star more reliable on higher timeframes?

Yes, the pattern tends to be more reliable on daily or 4-hour charts because they filter out market noise. On lower timeframes like 5-minute charts, the pattern may appear frequently but with lower accuracy due to volatility and fakeouts.

What if volume is high on the first candle but not on the third?

This scenario suggests continued bearish momentum. Even if the third candle is green, lack of volume indicates weak buying interest. Traders should avoid entering a long position in such cases, as the reversal signal is not confirmed.

How do you distinguish a morning cross star from a simple doji reversal?

The morning cross star specifically includes a sequence of three candles with a bearish candle, a doji after a downward gap (or price drop), and a bullish engulfing or strong reversal candle. A standalone doji lacks this structure and requires additional confirmation.