$BTC Below is a concise and easy-to-understand article about the low liquidity effect:
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[Low Liquidity Effect – The Silent Trap in the Market]
Many people only look at prices, but do not pay attention to liquidity – a silent yet extremely important factor in determining the "real" nature of a price increase or decrease.
1. What is low liquidity?
It is when there are not many buyers and sellers, resulting in thin order books and weak trading volumes.
2. What happens when liquidity is low?
Prices can be easily pushed up or down sharply with just a moderate volume.
It is very easy to experience a "stop loss hunt" – prices suddenly spike or drop and then return to previous levels.
Large orders from whales or exchanges can easily stir up the market.
3. When is the market likely to fall into a low liquidity state?
On weekends, especially Sunday nights.
Before the US session (around 11 AM–2 PM VN).
After major news (the market stands still).
During international holiday periods.
4. Advice when encountering low liquidity:
Do not FOMO.
Avoid entering trades based on "spike candles."
If you have already entered a trade, use low leverage and set reasonable stop losses.
Carefully observe the volume to confirm the reliability of the trend.
In summary:
> Low liquidity does not kill anyone, but it can easily create psychological traps and a "clean sweep".
The more experienced a trader is, the more they must observe liquidity – not just look at candles.