Liquidity Pro Tip #technicalanalysis #trading

26 Apr 2023 · 1 min

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In this short technical‑analysis tip, The Art Of Crypto explains that market liquidity typically accumulates just below key swing lows and just above key swing highs, especially those visible on the 4‑hour chart and higher timeframes. He uses a Ferrari‑as‑the‑market metaphor, describing liquidity as the fuel that enables price movement; without it, market makers cannot price the market up or down. Consequently, to trigger upward price action a trader must “take” liquidity that sits below the price, while to trigger downward moves they must take liquidity that sits above the price.

Chapters

this is going to be another pro tip, is below every key swing low or swing high, especially a swing low or swing high that exists on the 4-hour chart and above, is going to lie liquidity. And you might be wondering, hey, what is liquidity? Well, if you think of the market in terms of, let's say the market is a Ferrari, liquidity is the fuel that allows the Ferrari to go up or go down. So liquidity is the fuel that moves the markets. Without liquidity, the market makers cannot do what they do in terms of pricing the markets up or down. So in order for the market to go up, you need to take the liquidity below. In order for the market to go down, you need to take the liquidity from above.