Spike Chart: What a Price Spike Is, How to Measure It and What Followed

A spike on a chart is a sudden, outsized move: one bar, or a few bars, whose range dwarfs the bars around it. It usually comes with news, a shock or a rush of orders, and often with a jump in volume. A spike can be read as exhaustion before a reversal, or as the start of a new move. The charts and counts below show that both happen, and that a clear rule helps more than the eye in telling a spike from an ordinary large candle.

How to define a spike

A spike only means something relative to the market's normal range. The charts on this page mark a bar as a spike when its range, high minus low, is at least three times the average true range of the 14 bars before it. The bar itself is left out of the average, so a spike cannot dilute its own threshold. A spike that closes above the previous close is marked as an up spike, one that closes below as a down spike.

Black Monday, October 1987

The chart above shows the S&P 500 index through the crash. Two bars stand out as down spikes. On Friday, October 16, 1987 the index fell from 298.08 to 282.70. On Monday, October 19, it fell to 224.84, a loss of 20.47%, its largest one-day drop on our closes since 1970; its range was 9.6 times the average true range of the previous 14 sessions. The Federal Reserve's history of the crash puts the Dow Jones Industrial Average's fall that day at 508 points, or 22.6%.

What followed, in full: the index closed at 227.67 a week later, on October 26, and at 246.76 on November 16, twenty sessions after the crash. It made its lowest close of the decline on December 4, 1987, at 223.92, slightly below the close of Black Monday. A third down spike came on January 8, 1988, when the index fell 6.8% to 243.40; it closed at 252.05 a week later. Our page on the 1987 crash covers the causes.

The tariff shock of April 2025

Two spikes framed the turn of April 2025 on the S&P 500 index. On Monday, April 7, the first session after a 10% US tariff on imports from all countries took effect on April 5, the index swung between 4,835.04 and 5,246.57 and closed at 5,062.25, 0.23% lower: a wide range with almost no net change, on a day when a rumor of a 90-day tariff pause spread and was denied by the White House. On Wednesday, April 9, the administration announced a 90-day pause on most tariff increases and the index rose 9.52%, to a close of 5,456.90 on our data: on our closes, its largest one-day gain since October 28, 2008.

What followed: the index fell back over the next sessions and made its lowest close of the following four weeks on April 21, at 5,158.20, still above the close of April 7. Twenty sessions after the April 9 spike, on May 8, it stood at 5,663.94. The ETF on the chart shows the same two spikes; its daily changes differ slightly from the index because the ETF prices are adjusted for dividends.

Bitcoin, August and September 2026

Daily Bitcoin made three up spikes in a row on August 19, 20 and 21, 2026, rising from a close of 64,725.42 on August 18 to 78,338.03 on August 21, a gain of 21.0% in three days. Those spikes did not reverse: until the next spike, the lowest close was 75,644.48 on September 15. The fourth spike, on September 21, took the price to a high of 87,395.67 and a close of 86,620, the highest close of the window. That one marked a top so far: the close slipped to 80,150.56 on October 26 and stood at 81,343.50 on October 28, the last bar of the chart.

What followed past spikes

We counted every spike, with the rule above, on the daily S&P 500 index from January 1970 to October 2026 and on daily Bitcoin from August 2017 to October 2026, and measured the close 20 sessions later. All days are shown for comparison.

On the index, both kinds of spike were followed by gains a little more often than an average day, but on 12 and 52 cases the gap is within what chance produces. On Bitcoin, only the up spikes stand apart, and they come in clusters: 12 of the 38 came within 20 days of a previous one, so their 20-day windows overlap. Not every down spike on the index rebounded either. On May 6, 2010, the day of the flash crash, a large sell program began at 2:32 p.m., broad indexes fell to intraday losses of 9% to 10% and largely recovered by about 3:00 p.m., according to the joint report of the CFTC and SEC staffs (archived copy of October 16, 2026). The index's range was 5.5 times its average true range and it closed 3.2% lower, at 1,128.15; twenty sessions later it was lower still, at 1,064.88. These figures exclude costs, cover two markets and very few cases, and are not a trading test.

Other meanings: spike and channel, spike candlestick

Two other uses of the word come up in trading searches. In the price action vocabulary of Al Brooks, a spike and channel is a continuation pattern: a strong first move, the spike, made of consecutive trend bars, followed by a shallower sloping channel in the same direction, which often turns into a trading range, as LuxAlgo's glossary describes it. The same move can look like a spike on one time frame and a channel on another.

The three Bitcoin spikes of August 2026 followed by a slower climb to September 21 have that shape on the daily chart, though we have not tested the pattern.

A spike candlestick, in casual use, is a single candle with a very long wick on one side, where price shot out and came back before the close. That is a range spike with little net change, like April 7, 2025 above; the candle itself is covered on our long wick candles page.

How traders approach spikes

• Find the cause first. A spike on scheduled news, a policy change or a liquidation cascade carries different information from a single erroneous print.
• Wait for the close. The close sets the direction of the spike and the size of the wick.
• Size down. A spike widens the average true range, so a stop at the same multiple of it is farther away and the position should be smaller for the same risk.
• Look at the market. Our counts differ between the index and Bitcoin, but on so few cases they do not support a rule for either.

A spike that reverses fast can draw a V-bottom, a pattern we measure on our bench. More guides are in technical analysis.