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How to identify Mitigation Blocks on crypto K-lines? (SMC Entry)

Mitigation Blocks form when price sweeps liquidity and closes decisively beyond prior imbalance—requiring 3+ closes in zone, volume confirmation, and alignment with FVGs for high-probability SMC entries.

Feb 04, 2026 at 04:00 pm

Understanding Mitigation Blocks in SMC Context

1. Mitigation Blocks represent zones on a crypto K-line chart where previous imbalance or liquidity has been fully absorbed and subsequently invalidated by price action.

2. These blocks appear after a strong directional move followed by consolidation, where price retests prior swing highs or lows but fails to continue beyond them.

3. A valid Mitigation Block forms only when price sweeps the opposing liquidity pool and closes decisively beyond the origin of the prior imbalance.

4. Traders often mislabel simple retracements as Mitigation Blocks—true mitigation requires structural confirmation through candlestick close behavior and volume profile alignment.

5. In BTC/USDT or ETH/USDT charts, Mitigation Blocks frequently coincide with institutional order cluster areas identified via footprint analysis.

Visual Characteristics on K-line Charts

1. A Mitigation Block manifests as a horizontal rectangle spanning multiple candles, anchored between two equal highs or lows that were previously respected as support/resistance.

2. The block’s upper and lower boundaries must align with at least three distinct candle wicks or closes—not just one isolated spike.

3. Volume spikes within the block zone reinforce its validity, especially when accompanied by narrow-range, high-volume candles indicating absorption.

4. On 15-minute and 1-hour timeframes, Mitigation Blocks show higher reliability due to reduced noise compared to sub-5-minute intervals.

5. False breaks—where price briefly penetrates the block boundary but reverses within the same candle—disqualify the formation until confirmed by a subsequent close outside the range.

Correlation with Liquidity Sweeps

1. Mitigation Blocks rarely occur without a preceding liquidity sweep, typically targeting stops clustered above recent highs or below recent lows.

2. The sweep must be sharp and singular—not a prolonged grind—followed immediately by a reversal candle closing inside the newly defined block.

3. When BTC sweeps liquidity above $65,000 and then closes below $64,200 with a bearish engulfing pattern, the zone between $64,200–$65,000 becomes a candidate Mitigation Block.

4. Order flow data shows increased market sell orders during the sweep phase, visible as delta divergence on depth-of-market displays.

5. Absence of follow-through momentum after the sweep invalidates the block; sustained sideways compression for more than 8 consecutive candles suggests non-mitigation behavior.

Integration with SMC Entry Logic

1. SMC entries triggered at Mitigation Block boundaries require confluence with fair value gap (FVG) alignment—especially when the FVG overlaps the block’s midpoint.

2. A long entry is considered high-probability only if price approaches the lower edge of the block while exhibiting bullish rejection candles and rising bid-side volume.

3. Stop-loss placement must sit beyond the farthest wick outside the block—not inside it—to avoid premature exit from volatility spikes.

4. Take-profit targets are derived from measured moves: distance from block origin to sweep peak projected from block’s opposite edge.

5. Entries executed without confirmation from time-based filters—such as waiting for London or New York session open—show statistically lower win rates across SOL/USDT and XRP/USDT pairs.

Frequently Asked Questions

Q: Can Mitigation Blocks form on weekend candlesticks in crypto markets?Yes. Since crypto operates 24/7, weekend K-lines carry full structural weight. A Saturday 4-hour candle closing beyond a prior swing point qualifies equally with weekday candles.

Q: Does leverage level affect Mitigation Block validity?No. Leverage influences position sizing and risk exposure but does not alter the objective price structure defining the block. A block remains valid whether observed on Binance Futures or Bybit spot charts.

Q: How many candles must close inside a Mitigation Block to confirm it?Three consecutive closes within the block boundaries are required. Single or dual closes may indicate temporary pause rather than structural mitigation.

Q: Do altcoin pairs exhibit Mitigation Blocks with same frequency as BTC/USDT?Altcoin pairs display Mitigation Blocks less frequently due to lower liquidity depth. Verified blocks in ADA/USDT or DOGE/USDT appear roughly 40% less often than in BTC/USDT across identical timeframes.

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

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