ALGOUSDT | "Power Of 3"Quick analysis on a textbook bullish "Power of 3" setup on ALGOUSDT
What is "Power of 3"
- Power of 3 setups occur when "smart/big" money is building a position and creating liquidity. Setups can be seen with bullish / bearish scenarios, today we will be digging into a bullish setup.
- While retail can enter positions as orderbook allows, smart money must use more complex methods to build a position. In a bullish scenario we can observe an accumulation zone, price will typically chop in a short range causing traders' bias/positions to flip flop, this is where smart money is building the bulk of their position. In the manipulation zone, price consolidates below a key broken point which will provoke seller/short interest, the added pressure allows smart money to further build the rest of their long position. Once smart money is positioned they want to provoke buyer/long interest (a reclaim of the broken S/R), this is where the expansion phase can begin. There is little to no resistance during the expansion phase because the bulk of short/sell pressure has already been absorbed, because of this, expansion can be quick and harsh.
This is just a very quick summary, I urge you to DYOR on "Power of 3" setups and come to your own conclusions/plan
My Plan for this scenario
- Enter long on a sweep of the manipulation/consolidation lows (i.e. 0.22 - 0.2180), or reclaim of the broken swing S/R
- T/P at 0.2750, however, a reclaim of the the monthly open will be key for confirmation of continuation. Reclaim 0.2750 and I will be eyeing further T/P toward liquidity at the broader range highs (marked on chart)
- Invalidation = clean break/close below range lows, or a breakdown on BTC
