1/6 #OrderBookAnalysis 🧵
TLDR: Liquidity=Sentiment
Liquidity placement in the order book reveals #Sentiment for a price range! 📊📈
💧 When more liquidity is concentrated around a particular price level, it indicates increased confidence or interest from #traders...
2/6 Analyzing the order book with a #DataViz tool like #FireCharts helps you mitigate risk by replacing speculative decisions with data based decisions.
No reason to speculate when you can literally see where higher concentrations of liquidity mark resistance and support.
3/6 Knowing where liquidity ISN'T, is as important as knowing where it is. Thin liquidity indicates zones with greater potential for volatility since price moves through them with less friction.
But there is one more aspect of #OrderBookAnalysis I personally value the most...
4/6 The ability to see liquidity movement and identify potential momentum shifts developing in the order book is actionable insight that gives you an edge. #ALPHA 💪💰
Volume Percentile filtering in #FireCharts 2.0 (beta) increases contrast in the chart to help you see it...
5/6 #FireCharts shows #BTC ask liquidity from the $29k - $32k range moved to the $27k - $29.5k range.
Short term, it indicates sentiment to distribute above $30k is #trending into the sub $30k range.
If that trend continues, the macro implications of that shift is bearish. #NFA
6/6 I hope you found this 🧵 on #OrderBookAnalysis with helpful. If you did, please comment and share it.
If you want to learn more about #FireCharts check out the video tutorials at the bottom of the page. materialindicators.com/products/fire-…
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