Market Structure Analysis
Break of Structure (BOS)
A bullish run culminated in a BOS to the upside, which typically signals a short-term bullish intent. However, this move acts as a liquidity grab, sweeping buy-side liquidity above the prior high.
Liquidity Sweep & Rejection
Price taps into the higher time frame sell zone, indicated by the shaded red region. The wick into this zone triggers stop-losses from breakout buyers and activates institutional selling interest, leading to a swift rejection.
Inducement & Trap Zones
Several trap zones are clearly mapped out on the descent:
These green areas represent engineered liquidity pockets where buy-side participants are induced to enter prematurely.
As price retraces into these zones, retail traders anticipate reversals, but these retracements serve only to fuel the continuation of the bearish leg.
Lower Liquidity Target (XXX zone)
The chart ultimately projects a move toward the equal lows marked near the $207 level—an area rich in sell-side liquidity. The consistent failure to break lower previously forms a pool of resting liquidity that smart money seeks to exploit.
Liquidity Engineering
The green dots on prior highs mark liquidity collection points—zones where retail buyers are most active.
The higher time frame red zone provides confluence for distribution and is a classic example of liquidity injection followed by reversal.
The step-by-step sell-off shows clear liquidity traps, where short-term demand is absorbed, reinforcing the bearish continuation.
Risk Management Considerations
Stop Placement: Must be placed above liquidity sweep highs and not within internal trap zones to avoid being manipulated out of the trade.
Scaling In: Given the presence of multiple trap zones, one could consider scaling in as price confirms rejection from each zone.
Targeting: A conservative target would be the liquidity void near $207; aggressive traders might look beyond if the structure accelerates.
Break of Structure (BOS)
A bullish run culminated in a BOS to the upside, which typically signals a short-term bullish intent. However, this move acts as a liquidity grab, sweeping buy-side liquidity above the prior high.
Liquidity Sweep & Rejection
Price taps into the higher time frame sell zone, indicated by the shaded red region. The wick into this zone triggers stop-losses from breakout buyers and activates institutional selling interest, leading to a swift rejection.
Inducement & Trap Zones
Several trap zones are clearly mapped out on the descent:
These green areas represent engineered liquidity pockets where buy-side participants are induced to enter prematurely.
As price retraces into these zones, retail traders anticipate reversals, but these retracements serve only to fuel the continuation of the bearish leg.
Lower Liquidity Target (XXX zone)
The chart ultimately projects a move toward the equal lows marked near the $207 level—an area rich in sell-side liquidity. The consistent failure to break lower previously forms a pool of resting liquidity that smart money seeks to exploit.
Liquidity Engineering
The green dots on prior highs mark liquidity collection points—zones where retail buyers are most active.
The higher time frame red zone provides confluence for distribution and is a classic example of liquidity injection followed by reversal.
The step-by-step sell-off shows clear liquidity traps, where short-term demand is absorbed, reinforcing the bearish continuation.
Risk Management Considerations
Stop Placement: Must be placed above liquidity sweep highs and not within internal trap zones to avoid being manipulated out of the trade.
Scaling In: Given the presence of multiple trap zones, one could consider scaling in as price confirms rejection from each zone.
Targeting: A conservative target would be the liquidity void near $207; aggressive traders might look beyond if the structure accelerates.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Looking for powerful AI trading signals? Visit ProSignal.ai and take your trading to the next level! or join our telegram channel at t.me/prosignalai
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.