Smart Money Concept

Supply and demand trading involves placing orders in zones where price tends to reverse due to various factors. This is similar to support and resistance levels but broader in scope and often supported by fundamental factors.

Typically, prices react strongly to supply and demand zones, indicating significant buying or selling interest.

But how do you know when to enter? That’s what the accompanying chart aims to illustrate. Look for patterns based on a sharp rise followed by a pullback or its variations. Prices often retest the base area before pushing toward new highs.

These zones allow traders to adopt favorable risk-reward ratios in their trades. You can set a buy limit order before the price reaches the base, and the chart will execute the trade automatically. Note that stop-losses should usually be placed near the demand zone and below the supply zone.

Retail traders see a 50% drop → panic sell-off, posting, “Told you it was going to crash.”

Diamond hands see a 50% drop → silently add 200,000 BTC.

Every cycle follows the same script, just with a different audience.