🔴 This Is Not a Knife. It Is a Liquidity Hunt.
Entering after a liquidation sweep can look ugly in real time, especially on low-cap coins. A fast candle appears, positions are force-closed, and the chart looks dangerous enough to keep most traders away.
That is exactly where the setup becomes interesting in a quiet market.
Price reaches a liquidity pocket, clears leveraged positions, then fails to continue. With fixed risk and a controlled entry, the trade is built around the reaction after forced selling or forced buying has already happened.
📍 The Filter I Use
I suggest every screener user add a simple liquidation setup with the trigger based on the percentage of open interest liquidated.
Starting threshold: 0.5% of OI.
The dollar amount alone says very little. A $5K liquidation may be a major event for one coin, while $70K can be ordinary noise for another. The liquidated share of open interest shows how meaningful the sweep was for that specific market.
🟡 Long Setup
Longs are liquidated, price stops extending lower, and a recovery starts forming.
🟣 Short Setup
Shorts are liquidated, the squeeze loses momentum, and price starts fading back down.
The threshold can be adjusted depending on the market and the number of signals you want. A higher liquidated percentage of OI usually means a more significant forced exit event and a more valuable chart to inspect.
This setup belongs in quiet conditions. During a broad pump or market-wide selloff, liquidation spikes can simply feed continuation.
A screener does not replace execution. It points to the moment when someone else has already paid for the move, and the reaction becomes worth watching. $ELSA $EPIC $DASH
