$ETH impact on price.
🔹Minor impact at $11.41 since the liquidation volume at $11.41 thousand is relatively small, a price drop to this level is likely to have a limited impact on the overall price $ETH . Liquidation of these short positions may create slight buying pressure, but it is likely to be quickly absorbed by the market.
🔹Significant impact at $1599.91 a large concentration of liquidity of short positions at the $1599.91 level may have a significant impact on the price $ETH if it reaches this level. As the price approaches this level, traders holding short positions may begin to close their positions to avoid liquidation. This closing of short positions involves buying ETH, which could lead to a sharp price increase due to the short squeeze effect (#ShortSqueeze ). The more liquidity is concentrated at this level, the stronger this effect may be.
🔹Trading strategies.
🔹Considering this liquidity information, traders may consider the following strategies:
🔹Monitoring liquidity levels: Carefully monitor the price of ETH in relation to these liquidity levels. An increase in trading volume or volatility near the $1599.91 level may be an early sign of a potential short squeeze.
🔹Trading on the breakout of the 1600 level aggressive traders may attempt to open long positions just before or at the breakout of the 1600 level, anticipating further price increase due to short squeezing. However, this carries significant risks as the breakout may be false.
🔹Placing stop-loss orders: Traders holding long positions should place stop-loss orders below significant support levels to protect against a sharp price drop that may be caused by a cascade of liquidations if the 1599.91 level is broken down.
🔹Risk management: Regardless of the chosen strategy, it is critically important to use proper risk management, including setting stop-loss orders and not risking an excessive portion of your capital on a single trade.
🔹Using liquidity information as confirmation liquidity information should be used in conjunction with other technical analysis tools (e.g., support and resistance levels, trend lines, indicators) to confirm trading decisions rather than as the sole factor.
🔹Remember that the cryptocurrency market is highly volatile, and there are no guarantees that the price of ETH will react to these liquidity levels as expected. Always conduct your own thorough analysis before making any trading decisions.