Liquidations = imbalance ⚡
Where there is imbalance, there is often a trade.
When the whole market is not already moving in one direction, a local liquidation near a key level can become a clean entry.
A flush below support.
A squeeze above resistance.
Late traders get wiped.
Then price snaps back.
That is often not a real breakout. Sometimes it is just liquidity being taken.
What I usually want to see:
📍 liquidations hit at an important level
📍 the move is sharp, but the whole market is not expanding with it
📍 price fails to continue after the sweep
That is where I look for a trade in the direction of the liquidated side.
Because sometimes the market was not trying to break the level. It was just taking the money sitting there.
In Crypto Resources, we track not only every Binance liquidation, but also the percentage drop in open interest. That matters because liquidations alone show where traders got forced out, while open interest tells you how much positioning actually left the market.
Together, that gives a much cleaner read on whether this was real expansion or just a fast sweep for liquidity.
Pain creates imbalance.
And imbalance often creates the entry. 🔥
