$ME
Key Takeaways:
1. Liquidation Point Insight:
The significant short liquidations at $3.581 indicate strong upward momentum as shorts were forced to close their positions.
This level becomes a key support zone, as liquidations often mark areas of aggressive buying pressure.
2. Market Sentiment:
The liquidation suggests bullish dominance, likely driven by strong buying or a short squeeze. Traders are pushing the price higher, targeting liquidity in short positions.
Technical Factors to Consider:
1. Price Momentum:
If the price continues above $3.581, it signals sustained bullish momentum. A break below this level could lead to a short-term retracement.
2. Volume Analysis:
Look for a volume spike around the liquidation event. High volume confirms strong buyer activity, while fading volume may indicate exhaustion.
3. Support and Resistance:
Immediate Support: $3.581 (liquidation level).
Next Support: Check recent breakout levels or moving averages, e.g., $3.50 or lower.
Resistance: Identify historical resistance zones or round psychological levels like $3.70 or $4.00.
4. Indicators to Use:
RSI: Check for overbought conditions if the price is extended.
Bollinger Bands: Determine if the price is nearing the upper band, signaling potential overextension.
Moving Averages: Short-term moving averages (e.g., 5 or 10 periods) should be trending upward to confirm the bullish momentum.
Trading Strategy:
1. For Long Positions:
Enter above $3.60 if momentum sustains.
Target $3.70–$3.80, with a stop-loss just below $3.55 to manage risk.
2. For Short Positions:
Only consider shorts if the price breaks below $3.55 with high selling volume. Target lower support levels like $3.50 or $3.45.