Rapid price fluctuations in the Ethereum market are fueling speculation that market makers’ grid strategies were wrong.
Data shows that this strategy disruption led to sudden and sharp fluctuations in stock prices. $ETH price. Within a short period of time, long-wick candles were formed in both upward and downward directions, resulting in a significant increase in volume. These vertical, sharp price movements are sometimes referred to as “lightsaber” patterns, and indicate a scenario where liquidity is quickly eliminated and there is active trading in the order book.
Chart showing price changes $ETH.
Grid strategies generally aim to profit from volatile markets by placing automatic buy and sell orders within a certain price range. However, in times of high volatility or unexpected liquidity gaps, this order chain can backfire and cause even more volatile price movements. Triggered stop-loss and liquidation orders can further amplify volatility, especially during periods of high leverage.
*This is not investment advice.
