Equilibrium is the 50% level of a defined range — the exact midpoint between a swing high and swing low. It is the dividing line between premium and discount, and SMC treats it as the point of fair value where price is neither cheap nor expensive.
Why the midpoint matters
Because it marks fair value, equilibrium often acts as a pivot or magnet. Price frequently retraces to around 50% of a strong move before deciding its next direction, which is why the midpoint shows up in so many SMC and Fibonacci-based setups.
How to use it
Use equilibrium as a reference, not a rule: a bullish trade is more attractive when price is below equilibrium (discount), and a bearish trade when it is above (premium). It is a filter that stops you from entering at poor prices, best confirmed by structure and a level of interest.
Equilibrium is the 50% fair-value midpoint of a range — the pivot separating discount below from premium above.