Family, were you broken by ETH's violent spike last night? When I woke up this morning and scrolled through the community, I saw someone say, "The long position I just placed got swept, and when I flipped to short, it got blown up again. The main force is treating me like an ATM?" Another person humorously said, "I didn't receive my Christmas gift, but I got ETH's 'liquidation notice'. This year is unmanageable!" Haha, to be honest, this spike is indeed ruthless, but as a seasoned analyst, I immediately saw through the main force's little tricks—this is not random fluctuation at all, but a meticulously planned 'Christmas harvesting drama'!
Let me first break down the tactics logic of the main players: Firstly, during Christmas week, many retail investors are either busy celebrating or think the market will be quiet, so position management tends to be more casual, with wider stop-loss settings, which gives the main players an opportunity; secondly, ETH has been in a volatile range recently, with significant long-short divergence. The main players are taking advantage of this divergence to violently spike and simultaneously harvest positions from both sides, making profit from the price difference and washing out uncertain retail investors to pave the way for future trends; finally, as the year-end approaches, many institutions need to settle accounts, which may lead to fund reallocations. The main players can take advantage of this to create panic and accumulate at low prices.
Some may ask, how to judge whether the main player is washing or truly dumping? Here I will share a 'Main Player Direction Judgment Method' that I have used for many years, filled with practical insights, remember to save it! Step one, observe the rebound speed and strength after the spike: If the price rebounds to over 70% of the pre-spike level within 1 hour and is accompanied by increased volume, it is likely a wash; if the price slowly declines after the spike with weak rebound, it may be a true dump. Step two, observe the fund flow of large investors: By analyzing the top 20 large investors' positions from the leaderboard data, if large investors are increasing their spot holdings after the spike, it is a wash; if they are reducing their holdings, caution should be exercised for a potential dump. Step three, observe the sentiment in the derivatives market: If the funding rate of perpetual contracts quickly returns to normal after the spike, without a sustained negative rate, it indicates that market sentiment has not collapsed, and the likelihood of wash trading is greater.
Based on the current situation of the ETH spike, my judgment is: the probability of the main player washing is greater! Why do I say this? Firstly, the rebound speed after the spike was very fast, recovering over 80% in less than 1 hour, and the trading volume significantly increased, indicating that funds are buying at low levels; secondly, according to the leaderboard data, several leading large investors not only did not reduce their spot holdings but actually increased them; finally, although the funding rate for perpetual contracts briefly turned negative, it quickly returned to the positive range, and market sentiment did not collapse. Of course, this does not mean we can let our guard down; if the price cannot break through the upper edge of the volatile range later, there is still a risk of a pullback.
Regarding operational strategies, I have three suggestions: First, do not chase prices up or down. After this spike, the market needs some time to digest; the short-term probability is still a volatile trend, so patiently wait for a breakout signal; second, keep your position control within 30%, as there are too many uncertainties in the market at year-end, do not put all your eggs in one basket; third, if you have positions, set your stop-loss below the spike low. This way, even if the main player truly dumps, you can stop-loss in time to avoid greater losses.
To be honest, in the crypto circle, who hasn't been harvested by the main players a few times? The key is to summarize the experience from each harvest and understand the main players' tactics. I usually organize various operations and tactics of the main players into notes, including characteristics of wash trading, dumping, accumulation, and distribution. If you currently feel helpless and confused in trading and want to learn more about the crypto world and get firsthand cutting-edge information, follow me.
