Liquidity is the lifeblood of the market. It is required for the market to work, and price change is a function of this liquidity.
The quantity of liquidity present is elastic to the quantity of orders. This means the more orders there are, the more liquidity there usually is (it’s not directly proportional but roughly).
Orders are usually placed at certain price levels. Therefore, liquidity is located where those orders are placed.
As a large chunk of retail is breakout traders, and they usually place their orders near the highs and lows, those are prime areas for “sweeping” liquidity: market makers or other large participants can perform momentum ignition to trigger breakout traders’ orders, before reversing course to take price in the other direction and take their stop losses. This means breakout traders buy at a premium and sell at a discount to large players.