Definition
A liquidity sweep is a market event in which price rapidly moves through an area with clustered resting orders, such as stop orders or limit orders, to access concentrated liquidity. It typically occurs around obvious technical levels, where many participants have placed orders that can be triggered in quick succession. The sweep effectively clears or “vacuum cleans” that band of orders, allowing larger positions to be executed with reduced slippage once the liquidity has been unlocked.
In crypto trading, a liquidity sweep is often associated with sharp wicks on candlesticks, where price briefly extends beyond a prior high or low and then quickly reverts. This behavior is closely related to concepts like a Stop Hunt or Liquidity Grab, where the focus is on exploiting or accessing the pool of orders resting near widely watched levels. As a concept, a liquidity sweep describes the structural interaction between price and clustered liquidity, rather than any specific trading strategy.
Context and Usage
The term liquidity sweep is commonly used in order-flow and liquidity-based analysis to describe how markets move toward and through areas of high order density. It emphasizes that price is drawn to liquidity, and that significant moves often coincide with the clearing of stops or passive orders at key reference points. In this context, a sweep is seen as part of the continuous process by which markets rebalance positions and redistribute inventory among participants.
Within advanced trading discourse, a liquidity sweep is distinguished from ordinary volatility by its focus on the intentional or structural targeting of resting orders. Observers may interpret a sweep as evidence that larger players required counterparties and used visible liquidity pools to obtain them. The concept is therefore used to frame price spikes not merely as random noise, but as events shaped by the location and depth of liquidity in the order book and around prior highs, lows, and other obvious stop zones.