Published: June 1, 2025
35
140
780

In this THREAD I will explain “Liquidity” 1. Liquidity Sweep 2. PO3 3. Volume 🧵(1/15)

Image in tweet by CryptoSoulz

1. Liquidity Sweep A Liquidity Sweep occurs when large market participants activate significant orders within Liquidity Zones. This causes rapid price movements

Image in tweet by CryptoSoulz

1.1 Liquidity Sweep Liquidity Run occurs when the price moves in the direction of the prevailing trend. Liquidity Run refers to a situation where the market price moves persistently in a single direction, consuming or "sweeping up" liquidity along the way.

Image in tweet by CryptoSoulz

1.2 Liquidity Sweep A Liquidity Sweep targets a specific level to trigger stop orders and cause a reversal. A Liquidity Run moves in one direction without reversing gathering Liquidity before making a major move. It is seen as a continuation of the short term trend.

Image in tweet by CryptoSoulz

1.3 Liquidity Sweep In a Bullish trend, a Liquidity Sweep is when price dips below a swing low, trapping sellers before reversing up. A Liquidity Run is when price breaks above a Swing High, signaling continuation higher. HTF trends are easier to identify than LTF

Image in tweet by CryptoSoulz

2. PO3 It dissects market movements into 3 distinct phases: Accumulation, Manipulation and Distribution

Image in tweet by CryptoSoulz

2.1 PO3 The Accumulation or Consolidation phase is the first step of the Power of Three. Where institutional traders begin to build their positions without causing major price moves. This phase typically occurs in a period of consolidation or range-bound trading

Image in tweet by CryptoSoulz

2.2 PO3 "Distribution Zone" refers to the phase where market manipulation by institutional traders begins to distribute their accumulated positions. This phase is characterized by price movements in the opposite direction of the initial manipulation.

Image in tweet by CryptoSoulz

2.3 PO3 Manipulation is where price deliberately move in a false direction to trick traders into taking the wrong position or getting knocked out of their positions This phase is seen as being characterized by sharp, misleading price movements aimed at manipulating liquidity.

Image in tweet by CryptoSoulz

2.4 PO3 Bearish PO3 is conformed by: 1. Accumulation: The price enters in a range 2. Manipulation: The price aggressively rallies above the range, creating liquidity above last highs 3. Distribution: Price expands downwards, breaking the MS with strong bearish candles

Image in tweet by CryptoSoulz
Image in tweet by CryptoSoulz

2.5 PO3 Bullish PO3 is conformed by 1. Accumulation: Longs are building up and price is in a range 2. Manipulation: Market sells of below the range, creating liquidity 3. Distribution: Price expands upwards, breaking MS with strong bullish candles and bullish volume

Image in tweet by CryptoSoulz

3. Volume When you are trading using Volume, understanding how to differentiate a true breakout from a Fakeout is crucial. Fakeouts is where a price breaks through a Support or Resistance Level but then reverses back. This can trap traders who enter too early.

Image in tweet by CryptoSoulz
Image in tweet by CryptoSoulz

3.1 Volume How do you know if a breakout is false? Using certain Indicators such as RSI, MACD or CVD will help you identify a reversal. Volume is the key in identifying the strength of a trend. Measure the volume that is flowing in a chart, to know if its a breakout or not.

Image in tweet by CryptoSoulz

3.2 Volume Stop hunting is when the volume and price change during trading, triggering Stop Losses that drive up volatility. Low volume during a breakout attempt often signals a lack of market conviction, making it more likely that the breakout will fail.

Image in tweet by CryptoSoulz

3.3 Volume If a Bullish Breakout is driven by Stops being triggered and not new willing buyers, breakout is going to fail. In a Bearish Breakout, if no new sellers are trading the breakout, what will drive price lower? Fakeouts are nearly always accompanied by stop hunting.

Image in tweet by CryptoSoulz

Share this thread

Read on Twitter

View original thread

Navigate thread

1/15