RE: LeoThread 2025-08-27 12:19
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📈 False breakouts and liquidity traps
A breakout isn’t confirmed by price alone, it’s confirmed by liquidity.
The common pattern:
🟡 Price breaks a key level with high volume → everyone piles in
🟡 Retrace happens on thinner volume → looks harmless at first
🟡 Positions unwind fast → reversal wipes out late buyers
What’s really happening: large players use the breakout to unload size into eager breakout traders. Once that liquidity is absorbed, the move has no fuel, and price collapses.
False breakouts matter because they show who’s trapped. When volume and follow-through don’t align, it’s often a signal of smart money exiting, not entering.
Lesson: watch the quality of volume, not just the candles. A clean breakout without sustained liquidity is often the setup for the next dump.
!vote