Short

Market hunts early sellers

Updated

The market is currently looking for liquidity to gear for a move down. Price has printed sell-side liquidities, which shows the interests of early sellers. As we know, liquidity is fuel for the market, so we expect the price to take out the early sellers and take a plunge for unmitigated order block.

Concepts Used
Liquidity
Orderblock
Market Structure
Inducement

Note

The market mitigated the 1h/4h demand zone (blue zone at the bottom), and now the price seems consolidated in the orange zone. The Orange zone serves as the daily supply area. It appears weak in resuming the overall downtrend, so as expected, the market is respecting by tapping on the Buy Side Liqduidities first before breaking the orange zone.
Possible Trade scenarios would be generated following the liquidity hunt. The market is leaving Buy Side Liqduidities in the orange zone, signalling a trap is forming. I expect yesterday's gap to close before taking out the orange zone.

Note

Daily Buyside Liquidity Trap

Market dynamics are simply indicating a consolidation of Buy Side Liquidity on a daily time frame. It will be attempting to trap the buyers into early longs. The green zone, the inducement zone, which is inducing (buyers take positions) traders into the market, will be hunted down by institutions which are looking for liquidity to fund the upside movement. Therefore, In order to go higher market draws funds from retailers by trapping them into early buying.
If you zoom out the daily chart, you will realise that Buyside Liq. is greater than Sell Side Liq. so I presume to take a short position until maybe the liquidity gap (pink box) is filled. I am unsure from where the price will start going down but before it takes out BSL, it will eat up the sellers around 37000-37400 before going down. So, this price zone is hinting at selling momentum.

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