A sudden dip in the cryptocurrency market is often the result of a "whale trap," a strategic move used by wealthy investors, known as "whales," who have the power to influence market trends. Here’s how this manipulation typically plays out:
First, the whale initiates a massive sell-off, sparking a wave of fear among smaller investors. As prices start to drop, panic sets in, and retail traders rush to sell off their assets in an attempt to avoid further losses.
This panic quickly spreads, leading to a mass sell-off that accelerates the decline across the market. The fear of losing out pushes more traders to dump their assets, driving prices even lower.
Once the market bottoms out, the whale discreetly re-enters the scene, buying up assets at a significantly lower price. This allows them to regain substantial holdings at a discount, eventually stabilizing the market.
This tactic preys on the emotions of inexperienced traders, causing impulsive decisions that benefit the whale, who expands their portfolio at a reduced cost. In the unpredictable world of cryptocurrency, such manipulation is not uncommon and often goes unnoticed.
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