First of all, let's clarify: most of us participate in the cryptocurrency market with one goal—making money. This is not an investment in revolutionary technology or loyalty to any specific project. People buy assets with the purpose of selling them for profit and continue. Statements about 'superior technology', 'innovative solutions', or 'impressive fundraising rounds' are often marketing tools designed to build trust. The cryptocurrency market thrives on trust and hype rather than the inherent value of the technology.
In a downtrend, even the most advanced technologies will see their related assets plummet. Altcoins, in particular, are often nothing more than a gambling game staged by big players ('whales') to generate huge profits. Understanding market cycles is very important because they follow a predictable sequence: Bitcoin ($BTC) leads the price increase, followed by Ethereum ($ETH), then the top coins and finally smaller altcoins and ecosystems. Let's explore how whales manipulate these cycles to pump and dump coins, so that participants have no doubt to hold their bags.
Step 1: Accumulate at the bottom
The first stage of this cycle is accumulation, occurring at the market bottom. When observing the chart, you can often identify this stage as a prolonged sideways movement with low volatility. During this time, whales quietly accumulate a large amount of assets, often from retail investors who bought in at higher prices. These exhausted investors, worn down by continuously falling prices and new lows, surrender and sell their shares.
Step 2: Push gradually
When whales accumulate enough, they start pushing up the price. But why don't they pump up the price at once? The answer lies in liquidity. If a whale sells all of its shares after a sudden increase, the chart will collapse - think of the infamous Luna crash. Instead, they pump the price gradually, creating multiple waves of increase.
In the first wave, new retail investors who entered the market began buying due to FOMO (fear of missing out). Newcomers tend to pursue coins that are performing well instead of buying when prices are low. They sell off when prices drop 10%-20%, but they eagerly jump back in when prices start to rise again.
At the same time, some investors who bought during the accumulation phase will take advantage of this opportunity to sell and make quick profits, but whales have prepared for this. They allow prices to consolidate within a narrow range for a period of time, eliminating impatient traders and moving to other trending coins.
Step 3: Geometric growth phase
After removing the weak hands, the whales will initiate the next price increase, often doubling the price. This attracts the attention of those who sold before, making them regret their decision. These investors return to the market, usually at a much higher price, hoping to ride the wave.
At this stage, other retail participants who missed previous opportunities are jumping in as well. The media begins reporting the "dizzying rise" of the currency, fueling even more FOMO. People start believing that the price will continue to rise indefinitely, and many begin merging their initial investment with profits in mind. They persuade themselves that their entire investment portfolio will continue to increase.
Step 4: Distribution
When prices reach euphoria, whales begin to sell off their assets. They do not sell everything at once; instead, they gradually distribute their assets. Prices may stagnate or experience small dips, but retail investors see these as normal corrections and continue to buy in. Optimism spreads as people believe prices will recover stronger than before.
However, when the whale completes its liquidation, the buying pressure gradually decreases. Eventually, the price starts to decrease significantly. At this point, most retail participants have invested a lot, buying near the peak. When the price drops, a panic selling situation occurs, accelerating the decline process.
Step 5: Troubleshooting and resetting
No longer significant buying interest, prices collapse, usually returning to previous or lower levels. Retail investors who bought at the peak have suffered heavy losses. Meanwhile, patient whales are waiting for the cycle to reset, preparing to repeat the process.
Key Points
Recognize Accumulation: Observe prolonged sideways price movements at low levels—this is when whales are accumulating. Understand Liquidity: Whales gradually pump the price to create liquidity for a future sell-off. Beware of FOMO: Avoid chasing price spikes. Instead, focus on solid foundational coins that are currently undervalued. Exit before Euphoria: When everyone seems overly optimistic, that's often a sign to take profits. Learn from Mistakes: Experience is the best teacher. If you've been trapped in previous pump and dump cycles, use those lessons to make wiser decisions.
By understanding these motivations, you can navigate the market more effectively and avoid becoming a victim of carefully orchestrated whale strategies.
DYOR! #Write2Win #Write&Earn $BTC
{spot}(BTCUSDT)
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Pump-and-Dump Cycle in the Cryptocurrency Market: A Closer Look
First of all, let's clarify: most of us participate in the cryptocurrency market with one goal—making money. This is not an investment in revolutionary technology or loyalty to any specific project. People buy assets with the purpose of selling them for profit and continue. Statements about 'superior technology', 'innovative solutions', or 'impressive fundraising rounds' are often marketing tools designed to build trust. The cryptocurrency market thrives on trust and hype rather than the inherent value of the technology. In a downtrend, even the most advanced technologies will see their related assets plummet. Altcoins, in particular, are often nothing more than a gambling game staged by big players ('whales') to generate huge profits. Understanding market cycles is very important because they follow a predictable sequence: Bitcoin ($BTC) leads the price increase, followed by Ethereum ($ETH), then the top coins and finally smaller altcoins and ecosystems. Let's explore how whales manipulate these cycles to pump and dump coins, so that participants have no doubt to hold their bags. Step 1: Accumulate at the bottom The first stage of this cycle is accumulation, occurring at the market bottom. When observing the chart, you can often identify this stage as a prolonged sideways movement with low volatility. During this time, whales quietly accumulate a large amount of assets, often from retail investors who bought in at higher prices. These exhausted investors, worn down by continuously falling prices and new lows, surrender and sell their shares. Step 2: Push gradually When whales accumulate enough, they start pushing up the price. But why don't they pump up the price at once? The answer lies in liquidity. If a whale sells all of its shares after a sudden increase, the chart will collapse - think of the infamous Luna crash. Instead, they pump the price gradually, creating multiple waves of increase. In the first wave, new retail investors who entered the market began buying due to FOMO (fear of missing out). Newcomers tend to pursue coins that are performing well instead of buying when prices are low. They sell off when prices drop 10%-20%, but they eagerly jump back in when prices start to rise again. At the same time, some investors who bought during the accumulation phase will take advantage of this opportunity to sell and make quick profits, but whales have prepared for this. They allow prices to consolidate within a narrow range for a period of time, eliminating impatient traders and moving to other trending coins. Step 3: Geometric growth phase After removing the weak hands, the whales will initiate the next price increase, often doubling the price. This attracts the attention of those who sold before, making them regret their decision. These investors return to the market, usually at a much higher price, hoping to ride the wave. At this stage, other retail participants who missed previous opportunities are jumping in as well. The media begins reporting the "dizzying rise" of the currency, fueling even more FOMO. People start believing that the price will continue to rise indefinitely, and many begin merging their initial investment with profits in mind. They persuade themselves that their entire investment portfolio will continue to increase. Step 4: Distribution When prices reach euphoria, whales begin to sell off their assets. They do not sell everything at once; instead, they gradually distribute their assets. Prices may stagnate or experience small dips, but retail investors see these as normal corrections and continue to buy in. Optimism spreads as people believe prices will recover stronger than before. However, when the whale completes its liquidation, the buying pressure gradually decreases. Eventually, the price starts to decrease significantly. At this point, most retail participants have invested a lot, buying near the peak. When the price drops, a panic selling situation occurs, accelerating the decline process. Step 5: Troubleshooting and resetting No longer significant buying interest, prices collapse, usually returning to previous or lower levels. Retail investors who bought at the peak have suffered heavy losses. Meanwhile, patient whales are waiting for the cycle to reset, preparing to repeat the process. Key Points Recognize Accumulation: Observe prolonged sideways price movements at low levels—this is when whales are accumulating. Understand Liquidity: Whales gradually pump the price to create liquidity for a future sell-off. Beware of FOMO: Avoid chasing price spikes. Instead, focus on solid foundational coins that are currently undervalued. Exit before Euphoria: When everyone seems overly optimistic, that's often a sign to take profits. Learn from Mistakes: Experience is the best teacher. If you've been trapped in previous pump and dump cycles, use those lessons to make wiser decisions. By understanding these motivations, you can navigate the market more effectively and avoid becoming a victim of carefully orchestrated whale strategies. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)