medium · Volume Price Analysis testing
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 set the stage for a sustained, high-volume markdown phase across the range.
- To trigger sell-stop orders and shake out weak holders while acquiring inventory at the lowest possible prices.
- To widen the bid-ask spread deliberately, maximizing the market maker's profit on every single round trip trade executed.
- To lure in a fresh crowd of short sellers so insiders can distribute remaining inventory at richer prices.
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