Introduction
Market liquidity plays a fundamental role in determining the price movements of digital assets. In addition to traditional technical analysis, understanding the behavior of large wallets and institutions helps to read market movements more clearly. This article provides a neutral educational perspective without offering any investment recommendations.
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What is market liquidity?
Liquidity refers to the ease of buying or selling a particular asset without significantly affecting its price. The higher the liquidity, the more stable the price movements become, while low liquidity markets may experience higher volatility.
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Behavior of large portfolios
Large portfolios typically rely on gradual entry and executing orders in areas of high trading volume, making support and resistance areas, as well as previous peaks and troughs, important points to monitor price interaction.
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Trading volume
Trading volume helps in understanding the strength of price movement. An increase in volume with stable price may indicate a temporary balance, while a rise in volume with clear movement reflects increased interest in the asset.
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Importance of risk management
Risk management remains a key element for all traders, including determining position size, using stop-loss orders, and avoiding emotional decisions in volatile markets.
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Summary
Understanding market liquidity and large trading behavior contributes to better reading of price movements and discipline in trading, emphasizing that the cryptocurrency market is not without risks.
