Crypto markets are characterized by phases of expansion and contraction, and these phases tend to repeat. Uptrending markets move in a rally-base-rally format, or when a rally is followed by consolidation, which results in another rally. Downtrending markets follow a similar pattern of drop-base-drop. On both sides, the consolidation phase is usually characterized by liquidity runs below key levels.
price rallies nearly 60% in less than two days Storj price has consistently stuck to the rally-base-rally structure with liquidity runs happening inside the base, also known as the consolidation phase. A lower time frame analysis after liquidity runs on 4-hour time frames would give traders a better entry before the explosion phase.
/USDT 4-hour chart While moves followed the rally-base-rally structure, other altcoins might not. Hence, it is important to identify the ongoing trend for each coin. Ideally, this can be done by observing past price action. Additionally, investors can also use momentum indicators and liquidity runs as signals before the start of a rally. Another example is Uniswap’s UNI token on the 15-minute time frame. UNI price swept sell stops resting below October 31 lows on November 1.