TLDR:
- Each resistance test removes sell liquidity, gradually weakening the barrier rather than strengthening it.
- Short positions accumulate above tested resistance, creating stop-loss clusters that fuel explosive breakouts.
- Horizontal resistance levels with three or more touches demonstrate institutional recognition and setup quality.
- Repeated price returns to resistance signal market acceptance and persistent demand, not rejection behavior.
Breakout probability increases with multiple tests at resistance levels, contrary to traditional technical analysis teachings.
Technical analyst Aksel Kibar challenges conventional market wisdom in a detailed explanation of modern market dynamics. The analysis focuses on liquidity pools, order flow, and auction theory.
Classical teachings suggest resistance strengthens with repeated failures. However, market behavior demonstrates the opposite trend through systematic liquidity depletion. Each test removes available sell orders and transfers inventory from sellers to buyers.
Liquidity Depletion Weakens Resistance Over Time
Resistance levels function as liquidity pools rather than solid barriers. Modern markets reveal these zones contain clusters of limit orders and resting sell liquidity.
Each price movement into resistance consumes available sell orders through transactions. This process gradually removes supply from the level.
The technical analyst compares resistance to ice being chipped away with each touch. Every test fills sell orders and reduces available supply at that price point.
Eventually, insufficient sellers remain to maintain the resistance level. This creates conditions favorable for eventual breakouts.
Buyers consistently absorb demand at these levels through repeated transactions. The inventory transfers from sellers to buyers during each test. This systematic reduction in available supply makes future breakouts structurally easier to achieve.
Short Positions Create Breakout Fuel Above Resistance
Market participants tend to initiate new short positions after repeated failures at resistance. Confidence in the level grows with each rejection, leading to tighter stop-loss clustering above. This accumulation of stops creates latent energy that fuels eventual breakouts.
When resistance finally breaks, short sellers must cover their positions simultaneously. Breakout traders and momentum participants enter the market at the same time. This combination creates a liquidity vacuum that accelerates price movement upward.
Aksel Kibar notes on his platform that strong breakouts frequently occur after multiple failed attempts. The concentration of stop-loss orders above well-tested levels amplifies the breakout move. This pattern explains why persistent testing often leads to decisive directional moves.
Horizontal Boundaries Signal Institutional Recognition
Horizontal levels carry particular significance in technical analysis, according to the analyst. These boundaries indicate institutional recognition and shared market memory across time periods. Multiple touches increase participant awareness and order clustering around these levels.
The analyst emphasizes mature chart patterns with a minimum of three touch points to pattern boundaries. This selection criterion improves signal quality and setup probability in trading decisions. Horizontal patterns from global exchanges demonstrate this principle consistently.
Markets operate as auction systems where repeated price returns signal ongoing negotiation. Persistence at specific levels indicates acceptance behavior rather than rejection.
Strong markets build bases through consolidation near resistance before continuation moves. This base-building process incorporates multiple tests as part of the natural market structure.
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