hard · Order Flow Analysis
If price makes a new low for the day but the bar's delta is strongly positive and the COT is located at the low, what is the most likely mechanical cause of this 'Bullish Divergence'?
- Institutional VWAP algorithms liquidating longs at the most advantageous price.
- A thin stop-run pushed price lower, followed by heavy passive institutional absorption at the low.
- A failure of the limit order book where bids were pulled during high volatility.
- Aggressive sellers successfully 'capping' the market to prevent a rally.
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