In the late-night Telegram groups of the crypto world, panic spreads like a virus, while at this moment, the dealer is quietly calculating the chips.
"Is this coin going to zero?" "Hurry and cut your losses, or you'll lose your shorts too!" Such conversations are rampant in the crypto world. As a female analyst who has been in the crypto space for many years, I have seen too many retail investors cursing at the dealers as soon as they see their holdings decline, always feeling that their dozens or hundreds of coins are being closely monitored by the dealers.
Is the truth really like this? How could the dealer have so much free time to cling to your little chips? Behind their wash trading operations, there is actually a carefully designed psychological game.
Today, I will reveal the truth behind market makers washing the market, allowing you to see through the logic behind this game.
The essence of washing the market: It's not about seizing chips, but about changing mentalities.
Many people immediately think of market makers seizing retail investors' chips when they hear 'washing the market.' In fact, washing the market is not a simple robbery, but rather an art of changing chips by market makers through high and low price fluctuations that manipulate retail investors' mindsets.
Clever market makers will hide their accumulation and create a false sense of scarcity, ultimately reaping profits through panic and greed. Imagine if a market maker controls a large circulation of a small coin, what results would they face if they directly raised the price? A price surge would lead retail investors to hold on, and no one would want to sell; the market maker would find themselves as the bag holder with no one to take over.
I once carefully observed the trend of a small coin, perfectly illustrating the entire process of market makers washing the market. This coin started at a price of 1.1 USDT, with a circulation of 12 million pieces, most of which were in retail investors' hands. A small team quietly absorbed about 30% of the chips, but they did not directly raise the price; instead, they began a meticulously planned market washing operation.
The classic four steps of market makers washing the market
The warm water boiling frog stage: The price declines slowly without large trading volumes or any news. At this point, retail investors begin to feel uneasy but still hold onto a sense of luck: 'Maybe it will rebound tomorrow.' This slight decline is meant to wear down retail investors' patience.
Sharp decline and bottom fishing phase: The price suddenly drops rapidly and then quickly rebounds. Many people think they have reached the bottom and rush in to buy at the bottom, only for the market makers to suddenly dump again, directly breaking below the previous low. Those who bought at the bottom are instantly trapped, their mentality collapses, and they can only cut losses. The market makers deliberately drive down prices to trigger stop-loss orders and then turn around and buy low from these stop-loss orders.
Panic creation phase: This is the most ruthless move, where market makers will release negative news, such as 'project party withdrawing capital' or 'core major holders exiting.' The price falls all the way down, and the market is in mourning, with retail investors completely desperate, all clearing their positions at a loss. Meanwhile, the market makers are accumulating a lot in this range. Using negative news from the crypto world, such as project technical failures or rumors of increased regulation, market makers suppress the price to trigger panic selling, thereby absorbing chips at low levels.
V-shaped reversal golden pit: When the market makers collect enough chips, they use a small amount of capital to quickly pull the price back to previous levels, creating a strong bullish candle. Those who previously cut losses dare not chase the highs, and new investors have their costs at higher positions. In this way, the market makers not only increase their chips but also lower their costs.
After such operations, the market makers' chips can significantly increase, while the uncertain floating chips in the market are completely cleared, paving the way for subsequent price increases.
How to see through the market makers' washing tactics?
As an analyst who has experienced multiple market cycles, I want to share several key signals to identify market washing:
First, look at the trading volume: During the washing process, market makers often buy and sell themselves, maintaining the trading volume at a certain level; whereas during sell-offs, trading volume typically shrinks when prices decline.
Second, look at the moving average direction: Clever market makers maintain their cost lines before and after a rise, and the moving average system provides certain support; whereas during sell-offs, the moving averages often form a bearish arrangement, continuing downward.
Third, observe market sentiment: When the community is shrouded in panic, negative news is rampant, but the price does not make new lows, it is likely that the market makers are accumulating. This is precisely the moment of market panic and greed.
Why are retail investors always washed out?
Ultimately, the market makers' 'screaming tactics' seem simple, but they hide the panic, greed, and luck inherent in human nature. Retail investors are easily washed out because we often trade with emotions rather than rational analysis.
I used to be like many newbies, panicking when I saw my account turn green and feeling anxious when it turned red. After paying countless 'tuition fees,' I slowly figured out the trick: the market never changes, but people's hearts do.
Final advice
The essence of the struggle in the crypto world is a psychological battle. The reason market makers can repeatedly succeed is that they exploit human weaknesses. To survive in this market, you must first recognize your own mindset and avoid being swayed by emotions.
Next time you see the price of a coin jumping up and down, ask yourself: Is this a real sell-off, or are the market makers washing the market? Don't be deceived by short-term fluctuations; holding valuable assets is more important than blindly following the trend.
In this zero-sum game market, ordinary investors often find themselves at an information disadvantage. Only by staying calm and rational can they avoid becoming the 'chives' that are harvested.
As Mr. X, who has managed dozens of coins, once said: 'In an unregulated market, individual investors can hardly defeat the market makers. The current cryptocurrency market is even worse than a casino, filled with scams and traps that ordinary investors are unaware of.'
I hope my sharing can help you avoid some detours. Remember, in this market, surviving is the biggest victory. Follow Ake to learn more first-hand information and cryptocurrency knowledge, becoming your navigation in the crypto world; learning is your greatest wealth!#ETH走势分析 #加密市场观察 $ETH
