Why LP Regime Uses High & Low Prices Instead of Daily Closes

Most liquidity pool analysis relies on daily closing prices. For liquidity providers, this creates a dangerous blind spot.

Liquidity positions are stressed intraday, not at settlement. LP Regime is designed to reflect how liquidity actually behaves in live markets.

The problem with close-only analysis

• Ignores intraday volatility
• Hides range violations
• Labels risky days as “safe”

An LP can be pushed entirely out of range and back in before the close. The close looks fine, but the LP risk already happened.

How LPs actually experience risk

• Price touches range boundaries
• Price moves outside the range (even briefly)
• Volatility expands intraday

These events are captured by daily highs and lows, not closes.

LP Regime’s definition of a range break

A Broke Range Day occurs when price moves outside the LP range at any point intraday, based on the daily high or low.

Closing prices are informational only.

Why this produces better decisions

• Reveals hidden regime deterioration
• Prevents false confidence
• Allows realistic volatility tolerance
• Avoids overreacting to noise

Conclusion

LP Regime does not predict price. It evaluates whether a market structure is compatible with liquidity provision.

High and low prices tell that story. Daily closes do not.

LP Regime publishes monthly liquidity regime assessments. Join the waitlist at lpregime.com.