What trend condition is indicated when prices are declining with high volume?

The indication of declining prices accompanied by high volume often suggests a strong downward trend. High volume during price declines underscores the conviction and momentum behind selling pressure, indicating that many traders are actively participating in the market as prices fall. This scenario typically reveals that sellers are dominating the market, and it can signify a continuation of the downward trend rather than a market bottom.

In the context of technical analysis, a market bottom is characterized by the slowing of declines or initial signs of buying interest after a prolonged period of falling prices. When high volume is associated with declines, rather than stabilization or emerging support, it does not imply that a bottom has been reached; instead, it reflects the continuation of selling activity.

The presence of high volume during a price decline is a strong indicator of market sentiment leaning towards further selling, which aligns with the characteristics of a pronounced downward trend. Therefore, the scenario is best described as indicative of a strong downward trend, highlighting the prevailing bearish sentiment amongst traders.