Crypto glossary
Liquidity grab (stop hunt)
A liquidity grab, or stop hunt, is a quick price move into a zone packed with stop orders or liquidation levels that reverses once those orders are filled.
Stop-loss orders and liquidation prices tend to cluster just beyond obvious levels: below a recent low, above a round number or past the edge of a range. When price reaches those clusters, the stops convert into market orders and the liquidations into forced trades, providing a burst of liquidity. A large player who needs to buy can push price down into sell stops and fill against them, after which the move often reverses.
The pattern is especially visible in crypto derivatives, where high leverage means many positions share nearby liquidation prices. Long lower wicks that pierce a level and recover within minutes are the typical signature, and traders using smart money concepts call these sweeps.
Not every wick is deliberate. Thin order books, news and cascading liquidations can produce the same shape without anyone hunting stops. Traders respond by placing stops away from the most obvious levels or by sizing positions so a wider stop is affordable.
Example
BTC has held 60,000 dollars for days, with many stops just below. Overnight it drops to 59,400, triggering stops and long liquidations, then climbs back above 61,000 within an hour.