Definition
A stop hunt is a trading concept describing an intentional push of the market price toward levels where many stop-loss orders are concentrated. When these clustered stops are triggered, they convert into market orders, creating a burst of forced selling or buying that can temporarily accelerate the price move. After this liquidity has been harvested, the price often stabilizes or reverses, leaving those stopped out at a disadvantageous level. The term is commonly used in discussions of market microstructure and perceived manipulation in both centralized and decentralized crypto markets.
Stop hunts are closely associated with the behavior of large, well-capitalized participants who can move price enough to reach known or suspected stop zones. The dynamic interacts with slippage, because the sudden execution of many stop-loss orders can worsen average fill prices. While not identical to front-running, stop hunts are sometimes discussed alongside front-running as examples of trading behavior that exploits order flow information. In practice, the concept is used to explain sharp, short-lived price spikes or wicks that appear to target obvious stop-loss levels.
Context and Usage
In crypto trading, a stop hunt is typically referenced when price briefly pierces a well-watched support or resistance level, triggers a wave of stop-loss orders, and then quickly returns to the prior range. Market participants interpret this pattern as evidence that liquidity resting at those stop levels was intentionally targeted. The concept highlights how the public placement of protective orders can create predictable liquidity pools that sophisticated actors may exploit.
The idea of a stop hunt does not require that every sharp move be manipulative; it primarily describes how concentrated stop-loss order placement can shape short-term price behavior. Discussions of stop hunts often focus on how visible order clusters, combined with thin liquidity, can lead to exaggerated moves and increased slippage around key levels. As a result, the term functions as a lens for understanding how order types like the stop-loss order interact with market depth, volatility, and the tactics of larger players.