In the current market environment, many retail traders get trapped by "fakeouts" at key resistance levels. To trade effectively in 2026, we must look past simple price action and understand Market Structure Shifts (MSS).
The Mechanics of a Liquidity Sweep
A liquidity sweep occurs when price moves past a well-defined swing high or low to trigger stop-losses and activate "breakout" orders, only to immediately reverse. This isn't random; it is the process of "Smart Money" filling large orders.
Key Logic for the Setup:
Look for "Equal Highs" or "Equal Lows." These are magnets for price.Price must breach these levels.We look for a strong, impulsive move in the opposite direction that breaks the local market structure.Rather than chasing the move, wait for a return to the "Fair Value Gap" (FVG) created during the displacement.
Trading isn't about predicting the future; it’s about reacting to confirmed shifts. For example, if
$BTC sweeps the $65,118 and closes back above it within a 4-hour timeframe, the probability of a mean reversion to the $72,271 increases significantly. Always prioritize the "closing" of the candle over the "wick."
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