Washing the plate is not about seizing chips, but rather changing retail investors' 'low-cost courage' into 'high-cost panic'.
As an old bird who has been in the crypto market for seven years, I want to talk about something real today—the matter of market makers washing the plate. I've seen too many people get nervous when they hear 'washing the plate', either selling too early and missing out on the market or holding on stubbornly and getting deeply trapped. In the end, washing the plate is not about market makers wanting to seize your chips, but rather about adjusting the psychological state of the market.
I remember the first small cryptocurrency I encountered, with a total supply of 10 million coins, priced at 1 dollar, and liquidity almost dried up—this is simply the 'dream coin' for the market makers. What will they do? They won't directly push the price up, but rather engage in a sophisticated psychological game.
Three steps of psychological warfare for the dealer's washout.
Step one: create the 'illusion of cheapness'.
Dealers will first slightly smash the price, for example, dumping 500,000 coins in batches to $0.85, then quietly buy them back while the daily chart shows three consecutive bearish candles. At this point, retail investors begin to feel uneasy: 'If good news doesn't lead to a price increase, there must be something wrong,' and their confidence starts to waver.
Step two: weave negative news to trigger a crash.
Next, Twitter suddenly reported 'project party wallet movements', coinciding with the price plummeting to $0.7, and the 24-hour turnover rate soared to 30%. This tactic targets the fear psychology of retail investors, many will panic sell overnight, while the dealer collects everything in the $0.6-$0.8 range.
Step three: repair the chart to complete the chip turnover.
Within three days, the price was pulled back to $0.9, but the 20-day moving average continued to rise. The cost for new bottom hunters was $0.9, while the original retail investors' cost was $1, collectively trapped at a 'high position'. After this process, the market's selling pressure is as light as a feather—because potential sellers have already exited during the sharp decline.
How to identify real washouts and true offloading?
I have summarized two key indicators that have proven effective over the past seven years:
1. Look at volume, not price: If the turnover rate remains above 15% during a decline, it is likely a washout; true offloading occurs with low volume.
The dealer deliberately creates the illusion of active trading during the washout, while often accompanied by a decrease in trading volume when offloading. This is because the washout needs to create panic, while offloading hopes to maintain the price as high as possible.
2. Observe the recovery of key moving averages: If it breaks below the 20-day line, but can recover with volume within three days, it’s a washout; if it cannot recover and the moving average turns down, the dealer may have already run away.
Different cryptocurrencies have different characteristics: for small coins, look for 'a sudden drop of 15% during the session but recovers within 4 hours'; for mainstream coins, look for 'a volume decrease while testing the 5-day moving average'; for medium to long-term, focus on 'breakthroughs at the upper edge of triangular consolidation' before considering entry.
Retail self-rescue: three iron rules.
Based on these observations, I set three iron rules for myself and share them with everyone:
If your cost is lower than the dealer's, treat the fluctuations as a show. If you are sure your entry cost is lower than the dealer's, no matter how they wash out, remain indifferent, because the dealer ultimately needs to raise the price to offload.
Negative news without significant volume is to be regarded as rumors. Bad news that does not come with heavy trading is likely panic information deliberately spread by dealers to get you to hand over your chips.
Never go all in on coins with a market cap below 100 million. Small-cap coins are easily manipulated, and in such a market environment, preserving capital strength is more important than pursuing short-term profits.
Conclusion: The light is in my hand, the road is beneath my feet.
Years of market experience tell me that there is nothing new in the crypto world, only the same stories repeating from yesterday. Dealers make money by creating panic and greed, while retail investors' greatest advantage is their ability to make flexible decisions.
Real investment in the crypto market requires insight into the psychological game behind price fluctuations. The only purpose of the dealer's washout is to get as many retail investors as possible to buy at high prices. Once you see through this, you can stand firm in this psychological battle.
The dark path of the past needed to be explored alone, but now the light is in my hand. It shines, steady and unflinching—the key is not whether you follow, but whether you see clearly the road beneath your feet.
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