Liquidity Voids Explained
A liquidity void is an area on the chart where price moved too fast for real two-way trade to occur. It’s an inefficient zone — barely any orders were executed there. That’s why price slices through it quickly again later. There’s nothing in the way.
What a Liquidity Void Actually Is
Liquidity voids form when aggressive order flow overwhelms the book and price jumps levels without meaningful transactions. It’s the same mechanic behind liquidity shocks — the book is empty, so price accelerates.
- thin volume
- big candles
- low transaction count
- no real battle between buyers and sellers
Why Price Loves Revisiting Voids
The market hates inefficiency. If price shot through a zone without trading, the market tends to come back later to “repair” it.
This is similar to how gaps fill — incomplete auctions get revisited.
How Liquidity Voids Form
| Cause | Effect |
|---|---|
| News shock | Price jumps multiple levels instantly |
| Stop-run cascade | Forced orders push price through empty zones |
| Momentum burst | Thin liquidity fails to slow the move |
| Market maker pullback | No quotes → void prints |
What Liquidity Voids Mean Going Forward
Voids tell you where price is likely to move next because:
- the area wasn’t fairly auctioned
- there’s no structure inside it
- liquidity is still thin there
- market tends to rebalance the inefficiency
How Traders Use Voids
- targets during trends
- retracement expectations
- mean reversion setups
- understanding why price accelerates in certain zones
Liquidity Voids vs. Gaps
Gaps happen when the market is closed; voids happen during live trading.
- voids = thin traded areas
- gaps = untraded areas
Bottom Line
Liquidity voids are footprints of violent moves. They show you where the auction failed. And failed auctions almost always get revisited — either to unwind a move or to launch the next one.