medium · Volume Price Analysis
A trader identifies a 'Spring' at the bottom of a potential accumulation zone.
What is the institutional logic behind this maneuver?
- To validate a bearish breakout and prepare the market for a sustained markdown phase.
- To trigger sell-stop orders and shake out weak holders while acquiring inventory at the lowest possible prices.
- To increase the bid-ask spread and maximize the market maker's profit on each round trip.
- To attract new short sellers so the insiders can distribute their remaining inventory at higher prices.
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