$DODOX 1. Why was liquidity increasing while price action was “unclear” (volatile or sideways)?
A battle between buyers and sellers (accumulation or distribution): An increase in liquidity without a clear direction (overlapping sideways movement) often means there is a strong struggle between the market maker (or whales) and retail traders.
Absorption: One side (such as a market maker) may be absorbing large amounts of selling or buying at a certain price level without allowing the price to immediately surge up or down. This generates high trading volumes (substantial liquidity) without clear price movement at first.
2. Why did liquidity remain calm for about half an hour?
A breather or “calm before the storm”: After a period of high liquidity and intense trading, liquidity is often temporarily depleted, or large orders are temporarily paused. Traders and speculators wait to see where the market will go next, reducing trading volume for a short time.
3. Why is liquidity decreasing while the candlesticks are rising now?
A rally on “low volume” (Low Volume Rally): This is very important and calls for caution. When prices rise (the candlesticks move up) while trading volume falls, this often indicates:
Absence of sellers: The price is rising not because buying pressure is massive, but because there is little selling pressure or few nearby sell orders. Buyers are therefore pushing the price up with light buying.
A potential fakeout (Fakeout):
A battle between buyers and sellers (accumulation or distribution): An increase in liquidity without a clear direction (overlapping sideways movement) often means there is a strong struggle between the market maker (or whales) and retail traders.
Absorption: One side (such as a market maker) may be absorbing large amounts of selling or buying at a certain price level without allowing the price to immediately surge up or down. This generates high trading volumes (substantial liquidity) without clear price movement at first.
2. Why did liquidity remain calm for about half an hour?
A breather or “calm before the storm”: After a period of high liquidity and intense trading, liquidity is often temporarily depleted, or large orders are temporarily paused. Traders and speculators wait to see where the market will go next, reducing trading volume for a short time.
3. Why is liquidity decreasing while the candlesticks are rising now?
A rally on “low volume” (Low Volume Rally): This is very important and calls for caution. When prices rise (the candlesticks move up) while trading volume falls, this often indicates:
Absence of sellers: The price is rising not because buying pressure is massive, but because there is little selling pressure or few nearby sell orders. Buyers are therefore pushing the price up with light buying.
A potential fakeout (Fakeout):