MAGIC +24.5% (Directional Strategy Resonance)
Local shortage with dominant market selling 📊
Price doesn’t respond to volume; limited demand absorbs selling and creates support. Impulse movement and profit-taking as volatility increases.
Table of content
Asset: MAGIC/USDT
Risk: medium
Level of understanding: beginner
Entry reasons
Cluster chart: during a local pullback, large volume clusters were formed (blue rectangle), within which market sell orders significantly dominated (red rectangle). However, despite the applied pressure, the price stopped reacting with further decline and did not show a meaningful continuation of the downward move.
Such market behavior indicates signs of a local deficit: sellers continue to actively expend volume, but their impact on price noticeably weakens, which often signals a potential shift in initiative.
In the Dashboard
Delta / Volume balance and limit delta: aggregated data across all pairs and exchanges confirms the observations from the cluster chart. During the analyzed period, market sell volumes were significantly higher than in previous areas, which is clearly visible on the delta histogram (red rectangle). At the same time, the price did not demonstrate a corresponding reaction and failed to update the local minimum.
Additionally, it is noted that during the same period, limit orders began to noticeably dominate on the buy side (green rectangle). This combination indicates active absorption of incoming market sell volume by limit participants, forming local support and further confirming the weakening of seller pressure.
Exit reasons
Cluster chart: from the entry point, an impulsive price movement was recorded, resulting in a total increase of approximately 24.5%. In this area, volatility increased significantly (blue rectangle), after which a pullback began to form.
Under conditions of elevated volatility, further position holding is associated with increased risk, as the market often transitions into a balance-seeking phase. In this context, closing the position appeared to be the most rational decision from a risk management perspective.
Conclusion
This analysis clearly demonstrates that the key factor in such trades is not the volume itself, but the price reaction to that volume. Despite the dominance of market sell orders, the market stopped declining, while limit demand began to consistently absorb incoming volume, forming local support.
Such situations occur in the market quite frequently. With a systematic assessment of the cluster chart, aggregated data, and limit liquidity, similar movements can be identified regularly within day trading, while maintaining risk control.
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