I'll explain how it works and how I use it personally.
1/11
So what does "Liquidity" mean?
While all three definitions are obviously correct, the bottom one is most relevant for us.
2/11
The levels I map out are often important pivots (reversal area's) with highs that haven't been touched in a while.
This means that there is most likely a lot of stop losses placed there. Because these are the most clear invalidation levels for most people.
3/11
In this case, price kept making lower highs so these highs are untouched.
We can likely conclude that above these highs, shorts have placed a lot of their stop losses.
That means that going ABOVE this level triggers these SL's and causes a lot of buying volume.
4/11
πΉWhy would we go to those levels?
This is because price often seems to search for liquidity.
If you would want to fill a lot of orders (into the hundreds of millions), it's easier to push price up into these area's where a lot of liquidity will be. Vice versa for longs.
5/11
If you'd for example push price up above these highs, you'd then see buying volume coming in from:
1. Short stops/liquidations being triggered. 2. Breakout traders buying the break of the previous lower high.
6/11
After that, either one of two things happen:
1. If the volume is very high, we often see a big short squeeze happening which can extend quite high and makes for a nice pump.
These short squeezes can cause a snowball-effect which makes price go higher at every break.
7/11
2. If the volume for continuation isn't there. Or price was deliberately pushed into these levels just to sell into the buying volume. We often see these highs taken out only to then reverse afterwards and end up in more downside.
We also call this a Swing Failure Pattern.
8/11
Whatever happens is very situational. For example when breaking the previous cycle's all time high at $20K. Price saw a huge short squeeze and never came back to even retest the level to this date. This was due to the huge amount of buying pressure on breaking that level.
9/11
Of course all of this can also happen in the opposite way.
Untouched lows? There's likely a lot of liquidity in terms of long position stop losses placed beneath there.
Expect selling pressure to come in whenever price clears that level.
10/11
I hope this cleared it all up a bit and gives you a good idea of how I work with these levels.
I think it gives you a good way to look at things from another perspective. Not seeing these levels as just as "A resistance or support". It's often a lot more than that.
11/11
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
@friendtech has taken this space like storm. It's been getting a lot of traction, capital inflow and bringing up opportunities for everyone involved.
Here's all you need to know π
First off, it might be smart to π Bookmark this thread for future reference.
Let's dive straight in!
1. What is Friend Tech and how does it work? 2. What ways are people making profit from it? 3. Airdrop 4. What I'm doing on Friend Tech 5. How I see the future for this platform 6. How to get on Friend Tech (Getting a Code & Bridging)
I suspect $SUI has to be for Binance what $SOL was for FTX/Alameda last cycle.
A new shiny layer 1 with lots of opportunities and no bagholders.
Binance Labs has invested $300M at a $2B valuation into Mysten Labs, the company behind $SUI. This is their biggest investment in any outside project ever.
Beating Sky Mavis (Axie Infinity) by a two fold.
Right now the float on $SUI is incredibly low compared to itβs total supply.
There will be a major unlock by November 2023.
Circulating Supply now: 668M
Circulating Supply November 2023: 2.184B
Thatβs over a 3x increase of which more than half goes to investors.
Let's dive into the world of trading psychology! It's important to realise how our emotions can impact decisions and success in the market.
This thread could help you become a better trader π
π Excitement is common when we start trading crypto. It's new, thrilling, and there's potential for big gains. But beware - this excitement can lead to impulsive decisions. Stay calm and stick to a strategy.
2/10
π Fear of missing out (FOMO) is a major challenge. Seeing others profit from a coin you don't own can cause you to buy at the wrong time. Don't give in - do your research and make informed choices.
Will shortly talk about my expectations and what would make most sense from the Fed's perspective.
πΈPause (12.2% Probability)
Likely to see market react positively but I feel like this will also cause some fear and doubt as the question will be: Is there more broken than we know?
I may consider fading any pumps following this.
πΈ25bps (87.8% Probability)
The most likely and "safest" approach I think. This will still show: 1. The fight with Inflation is ongoing and the Fed is not budging that easily while inflation is still high. 2. Shows the economy is strong enough to withstand another hike.