Bitcoin / TetherUS
Long

HOW TO Spot Liquidity-Driven Reversals & Market Traps

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Adaptive Liquidity Pulse

🎯 Spot Liquidity-Driven Reversals & Market Traps

The Adaptive Liquidity Pulse is designed to help traders detect high-volume rejections and absorptions, revealing where big players are likely defending or accumulating positions. This indicator is especially useful for spotting market traps, liquidity sweeps, and swing reversals.



🧠 How It Works
1. Dynamic Liquidity Zones
• Red Band (High EMA) → Potential supply/rejection zone
• Blue Band (Mid EMA) → Equilibrium / magnet zone
• Green Band (Low EMA) → Potential demand/absorption zone
2. Signal Labels
• 🔴 Rejection → Price spikes into high liquidity with volume → Bearish bias
• 🟢 Absorption → Price flushes into low liquidity with volume → Bullish bias
3. Volume-Weighted Detection
• Only triggers signals when volume exceeds a configurable threshold
• Filters out weak moves, highlighting true liquidity events



📊 Best Use Cases
• Scalping & Intraday Trading: Identify early reversal points
• Swing Trading: Track absorption/rejection cycles to time entries/exits
• Liquidity Sweep Detection: Spot where false breakouts occur with volume confirmation



⚡ Trading Tips
• Use Rejection (Red) for short entries or take-profits near highs
• Use Absorption (Green) for long entries or short exits near lows
• Combine with support/resistance zones or trend structure for higher accuracy
• Midline (Blue) often acts as a mean-reversion magnet in ranging markets



📢 Alerts
• 🔴 Rejection Alert → Strong selling pressure at liquidity zone
• 🟢 Absorption Alert → Heavy buying at demand zone



🧠 Why Traders Love It
• ✅ Visualizes hidden liquidity interactions
• ✅ Highlights trap zones before reversals occur
• ✅ Works across crypto, indices, forex, and commodities
• ✅ Designed for confluence with other strategies



This script gives you a real-time pulse of liquidity shifts, allowing you to trade like institutions and avoid falling into retail traps.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.