- Yesterday’s Prediction Validated: See how Bitcoin followed the anticipated liquidity hunt above and below
- Why Liquidity Matters: Understand the role of liquidity in shaping BTC’s price action
- Future Price Scenarios: Insights into retracement targets and untapped liquidity zones for BTC
In yesterday’s analysis, we envisioned Bitcoin’s potential price movement.
The expectation was for the price to sweep liquidity above, react to the supply zone, and then potentially dive to collect liquidity below. And what did Bitcoin do? Exactly that.
The price surged upward, grabbing liquidity, only to reverse and sweep the liquidity below. This isn’t magic—it’s market mechanics at play.
What Is Liquidity in Trading?
Liquidity in trading refers to the orders waiting to be filled, typically stop-losses and limit orders placed by traders. These clusters of orders often form above resistance levels and below support levels.
Markets, driven by big players like institutions, naturally gravitate toward these liquidity pools to fulfill large orders. It’s like bees drawn to nectar—liquidity fuels movement.
Why Does the Price Chase Liquidity?
Price moves toward liquidity because that’s where the volume is. To execute large buy or sell orders efficiently, institutions need counterparties—liquidity provides this.
This is why you often see price wicks sweeping above highs or below lows before reversing—it’s a hunt for orders.
What’s Next for Bitcoin?
Zooming into the M5 (5-minute) chart, there’s an opportunity to anticipate the next move. Looking at the current structure:
- There are three key supply zones above.
- The upper zone is more appealing due to the liquidity sitting below it.
If the price revisits these areas, it could present a shorting opportunity. However, keep an eye on the liquidity the price is currently building below.
The price might retrace gradually, leaving pockets of liquidity behind. If these pools remain untapped before a reaction to the supply zone, they could become future targets for the price.
Where Could Bitcoin Go Next?
If Bitcoin does retrace to fill liquidity, the next move could potentially take it toward the newly formed liquidity below. But as always, this is speculative.
While the price may align with these scenarios, the market is unpredictable and can defy expectations.
A Note of Caution
The scenarios discussed are possibilities, not certainties. The market’s movements are shaped by countless variables, and it can behave unpredictably.
By keeping liquidity in mind and analyzing supply zones, you can sharpen your trading edge while staying prepared for any twists the market might throw your way. Happy trading! 🚀
Disclaimer: The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk.
We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions
