Smart Money Concepts (SMC) in Crypto

Smart Money Concepts (SMC) in Crypto

If you are into crypto trading or even trading in traditional financial markets, you must have heard about the concept of Smart Money.

So what exactly is it? How did it come into existence? And why it exists? In this blog, we will break down this concept step by step so you can understand how smart money moves in the crypto market and how you can follow its suit.

So, let’s start with some basics first.

What Are Smart Money Concepts (SMC)?

Smart Money Concept helps you follow institutional traders, often known as “Smart Money.” Institutional traders or “Smart Money” are notorious for using the emotions of retail traders. Instead of buying breakouts and selling on fear, they create traps for retailers. They trigger your stop-loss, then reverse and ride the trend. SMC shows you how they do it—through market structure, liquidity manipulation, and precision entries.

This is a mindset that needs nerves of steel. Unlike most of the retail traders, institutional traders realize the value of their money. So they don’t gamble away after watching a couple of charts and identifying some patterns in them. They hunt liquidity, manage risk, and Trade in ranges where retail traders panic. SMC helps you recognize these footprints and align with them. Because if you trade against institutions and big money, there are strong chances that you might lose.

Why SMC Fits Crypto Trading?

Crypto runs on high volatility. That volatility makes retail predictable. They buy breakouts, chase green candles, and place stop-losses near swing highs and lows. Institutions see that and use it. They design liquidity grabs to trigger retail exits. Then, they enter in the opposite direction.

SMC fits crypto perfectly. It exposes how the market sweeps stop zones, forms fake moves, and shifts structure. These concepts apply to BTC, ETH, and even meme coins because liquidity mechanics are the same everywhere. Human behavior is repetitive across all financial markets, and big players take advantage of that.

Now, let’s understand how and when smart money enters and exits.

Where Smart Money Enters?

Smart money generally enters in the regions called order blocks on the charts. These are the positions where institutions have placed large positions before a move. Look at the last bearish candle before a bullish rally—or the last bullish candle before a strong drop. That’s often the order block.

Most importantly, institutions don’t fill trades in one go, even if they want to! Reason? They are placing big orders, and hence, they need liquidity. So they entered gradually, and that’s where the order blocks are formed.

Just take a simple example. Recently, BTC dropped to $75,004 on 9^th April 2025. You must have heard extreme noises of how BTC will break the 70k level and might go down. This is where smart money springs into action. This is where they will find a lot of liquidity as a lot of traders are willing to sell their positions.

Institutions take entries into such regions, but gradually. To keep people believing what they are believing!  

When you are trading cryptos like BTC, you’ll often see Bitcoin wicking into these zones before making sharp moves. That could be the institutional price zones.

How Pro Traders Use It?

Pro traders use SMC in multiple ways. They use it to:

• Find the last opposite candle before a big impulse
• Mark it as a zone, not a line
• Wait for the price to return to this zone
• Confirm with market structure shift before entering

In short, order blocks give you the level. Structure gives you the entry.

Why Liquidity Sweeps are The Real Trap?

Retail traders place stop-losses near swing highs and lows. Institutions know that. Liquidity sweeps are fake breakouts designed to grab those stops. The market pushes beyond a key level and then sharply reverses. That’s your ideal liquidity sweep.

In crypto, you’ll see this before major moves. BTC may break a recent high with one green candle, trigger breakout longs, then reverse and drop $500 in minutes.

Remember, liquidity is fuel. Institutions collect it, then drive the price where they want. Recognizing sweeps helps you avoid traps and catch reversals.

What to Watch?

• Price breaks a swing high or low
• Volume spikes
• Quick rejection with a wick
• Followed by market structure shift (CHOCH or BOS)

Sweeps create emotional reactions. SMC teaches you to ignore those and respond with logic.

What are CHOCH and BOS?

You can’t trade SMC without understanding the market structure. The structure shows where the trend stands and when it shifts.

• Break of Structure (BOS):

Continuation of current trend. Price breaks previous highs in an uptrend or lows in a downtrend.

• Change of Character (CHOCH)

The first sign of reversal. Price breaks a minor high in a downtrend or a low in an uptrend.

In crypto, this happens extremely fast. One candle can change the game. CHOCH confirms that smart money has shifted direction. BOS confirms continuation, and pro traders use these signals to time their entries with order blocks or fair value gaps.

What are Fair Value Gaps (FVGs)

A fair value gap forms when a strong impulse leaves behind an unfilled price zone. It shows an imbalance where prices moved too fast and skipped orders. Institutions often bring prices back to these gaps to fill orders before continuing.

You’ll spot it like this:

• A 3-candle sequence
• First candle bullish, middle bullish, third bearish
• No overlap between candles 1 and 3

That middle gap becomes your fair value zone. Crypto charts flash these daily. Smart traders use them to predict retracements.

How Pro Traders Trade FVGs?

They don’t use rocket science. They wait for the price to return to FVG. They also keep an eye on whether the market structure is CHOCH or BOS. Finally, they align their trades with the overall market structure. One very important thing here to understand is they don’t use FVGs alone. Smart traders combine them with order blocks and structures to form confluence.

How SMC Setup Blueprint Looks

Here’s how a typical SMC trade looks in Bitcoin or Ethereum:

1. Mark key highs/lows and liquidity zones
2. Watch for a sweep of those zones
3. Identify order block or FVG nearby
4. Wait for market structure shift (CHOCH or BOS)
5. Enter on a pullback into OB/FVG
6. Set stop-loss just outside the structure
7. Target the next liquidity level

This gives you clean entries and defined exits. With such a perfect blueprint, you can execute a plan and not just react to sharp price spikes in both directions. 

Why Retail Gets It Wrong? (Most of the Times)

The problem with a lot of retail traders is they love indicators too much!   RSI, MACD, Bollinger Bands, you name it, and they will know about it and use it relentlessly. But that’s not enough. Look, indicators are not wrong, or there is nothing wrong with using them. The problem lies in how retail traders use it. They use it to react emotionally. Smart traders fuse indicators, levels, market structures, and human emotions to take positions.  

The market generally moves to fill large orders. So it’s possible that when retail is chasing green candles, smart money is selling to them! And when retail panics, smart money enters the Trade.  

So, when you look at the market from the market maker position, you can flip your edge. You understand how smart money is moving, how retail is moving, and how you can plan your next move.

Why Risk Management Still Wins?

Look, no strategy is perfect in trading. Even the best SMC setups can fail, and they do fail. So, smart traders rely on risk management a lot. Risk management keeps you in the game. Smart money trades with defined stop-loss. Instead of overleveraging, they limit their position sizes. They even accept the losses that come with trading without getting emotional about it.

Crypto volatility makes stop-loss hunting common. That’s why SMC fits so well. You know where traps lie. You plan your Trade with logic instead of emotions.

Tools That Help Spot SMC Patterns

You don’t need fancy indicators to identify SMC patterns. Your simple and standard charting tools are enough for that. Here are some that you can use:

• TradingView: Draw OB, FVG, and liquidity zones clearly
• Visiion.io: Offers you an option to track smart money using charts and Trade at the same time.
• LuxAlgo or ICT SMC indicators: Use as a visual support and not signals
• Volume profile: Spot hidden liquidity pockets

Remember to stick to clean charts. If you go to smaller time frames, the noise might block your precision.

How Institutions Move Crypto?

Exchanges, funds, and even whales act with the same logic the smart money uses in forex and stocks. For example, they:

• Enter in blocks
• Use limit orders at key zones
• Manipulate short-term direction
• React to macro liquidity and news

You won’t see their names, but their behavior leaves footprints. SMC helps you follow those patterns.

Why Most YouTube “Experts” Mislead?

In your trading journey, you must have come across a lot of YouTube traders who claim to be experts. They often draw random boxes on the charts, call them “order blocks,” and promise 90% win rates. But if you follow them for just too long, you’ll find that they are wrong most of the time. What they do is sell you signals in return for some “learning fees.”

Remember, most of these traders are not reliable. Don’t fall for their tricks. Master your skills, learn about SMC on your own, and rely only on official channels like the one Visiion.io has for accurate information.  

A true SMC involves:

• Structure reading
• Liquidity anticipation
• Contextual confluence
• Dynamic thinking

If someone promises guaranteed profits from one indicator, close the tab..

How to Train Your Eye to Find Order Blocks?

Backtest everything. Go to the historical charts of BTC, ETH, and SOL. Mark CHOCH, BOS, order blocks, FVGs, and liquidity sweeps. Watch how the price reacts. Instead of rushing to live to Trade, build a solid conviction first.  

Training your eye will take weeks or even months. But once you see the patterns, you’ll never unsee them.

Wrapping Up

Smart Money Concepts are pure logic and human emotions. They’re the way institutions trap retail and move markets. In crypto, that logic plays out every day in BTC, ETH, and beyond.

To be a successful trader, you don’t have to predict the market. You can train your eyes with SMC and can identify where money enters, where it exits, and how the game unfolds.

Stick to clean charts. Mark liquidity zones and watch for sweeps. That’s how pro traders operate. Don’t trade against smart money because you can’t win, not for long! Trade with them and see how your capital grows!

Till then, happy trading.

Caution: Information shared in the above blog is for information purposes only. Consult your financial advisor before investing or trading in cryptos. Visiion.io does not recommend any crypto asset mentioned in the blog for trading or investing. Vision.io is not responsible for any potential losses you incur after trading based on the information in the above blog.