Many people speculate on coins, and always feel that "if the bulls are long, they will rise, and if the shorts are long, they will fall", thinking that the market is a long-short duel. But if you dig a little deeper, you'll see that the way the market works is far more complex than you think.

Sometimes, you may feel that the price is rising because the main force is pulling the market, and the price is falling because the main force is smashing the market. But the truth is, the market doesn't simply work that way. Many people like to draw trend lines on candlestick charts, trying to find the pattern of market operation. But when you review it, you will find that no matter how you draw it, you can always find a "reasonable" way to explain it, as if the market must be following your analysis. There's nothing wrong with that, but here's the thing – the market never follows your line.

Is the market going wrong? The teacher tells you that this is a parallelogram structure. Wrong again? Explain it in a prismatic way. Wrong again? Change to a rectangle. Why is this a drawing? Does the rise and fall of the market really depend on the squares you draw? Those who make deals do trades, and those who draw draw draw.
Trading is not a drawing, what really drives the price up and down is the flow of money, not a certain line, a certain pattern or a certain theory.

There are only two types of people in the market: liquidity providers (market makers) and ordinary traders.
The role of market makers is to provide depth of buying and selling, so that the market is liquid, they are not simply long or short, but to make trading smooth and maintain market stability.
Ordinary traders are "nomads" in the market, who will trade with price fluctuations in an attempt to make money from the market.

The point is that when market makers cancel orders, the market will fall into a "liquidity vacuum".
What does that mean? When the market depth is shallow, buyers and sellers cannot successfully trade, and prices fluctuate wildly. Many people mistakenly think that the "breakthrough" is the active buying of large funds, but in fact, what really drives the market is often passively triggered stop-loss orders and liquidation orders.

Let's take an example – let's say a lot of people open short positions in a certain position, and their stop loss level is usually placed in a specific area. Once the market touches these stop loss levels, the automatic closing of the position will be triggered, and the system will buy at the market price, forming a passive buying order. At this time, the market price will be quickly pushed higher, and this is not because the main force is pulling, but because a large number of short stop losses are swept away.

That's why the market often "hits your stop loss first, and then goes in the direction you predicted". You saw the market right, but the market first let you blow up and then continue in the right direction.

How does liquidity imbalance affect the market?
Each price range of the market is the balance point of the power of the long and short sides. But once a certain key point is breached, a large number of stop-losses are triggered, causing the market price to fluctuate wildly.
When the stop loss level of the bears is triggered, their position will be forced to close, and the system will automatically buy, pushing the price up. At this time, it is not that the main force deliberately sweeps the goods, but because the people who sell a large number are forced to become buyers, forming a "passive buying order".

More seriously, this situation can have a ripple effect:
1. The stop loss is triggered, triggering a large number of passive buy or sell orders.
2. Market makers cancel orders, the market depth becomes shallow, and price volatility intensifies.
3. More stop-losses are swept away, exacerbating the volatility of the market.
4. Programmatic trading and quantitative strategy intervention, follow the market trend trading, and further promote the acceleration of the market.
5. Eventually, a stampede effect is formed, and the market fluctuates greatly in a short period of time.

Why are there extreme market movements?
The market rises, not necessarily because the main force wants to pull the market, but because the short position is liquidated, the stop loss is swept away, and the liquidity is insufficient, and the trend is finally accelerated.

On the contrary, the market plummeted, not necessarily because the main force was smashing, but because the market makers canceled orders and liquidity collapsed, so that the longs' stop-loss orders and liquidation orders were detonated one after another, and finally formed a stampede.

If you've been stuck in the question "Is the market bullish long?" Long shorts? "In this mindset, you can never really understand the logic of the market. The essence of the market is not a simple long-short confrontation, but a liquidity game.

Stop staring at candlesticks and draw graphs, it's the liquidity that really determines the rise and fall of the market, not the trend lines you draw.