Whale Trap Defined: A market manipulation tactic used by large investors ("whales") to deceive smaller traders through false signals.
Artificial Price Surge: Whales accumulate large amounts of cryptocurrency, pushing the price upward, creating the illusion of a bullish trend.
Retail Investor Reaction: Smaller traders rush in, expecting further gains, buying at inflated prices.
Coordinated Sell-Off: Whales suddenly sell off their holdings, causing a sharp price drop.
Whales Profit: Whales secure profits by buying low and selling high, while smaller traders suffer losses as prices fall.
Risk for Retail Traders: This tactic is more effective in low-liquidity markets where a few big players can heavily influence prices, and retail traders acting impulsively are most vulnerable.
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