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Example from previous years: XRP in 2017-2018

🔹 Scenario:
During late 2017 and early 2018, XRP rose dramatically, reaching a record high of $3.84. These huge increases attracted thousands of traders who thought the price would continue to rise.

🔹 How did the liquidation happen?
1️⃣ Liquidity injection:
Whales and large institutions began to pump huge liquidity into XRP, which led to an exaggerated price increase.

2️⃣ Positive news:
Positive news about the currency was published, such as potential partnerships with global banks and the adoption of its technology in financial transfers.

3️⃣ Attracting traders:
With this momentum, new traders began to pump their money into buying XRP, which pushed the price up even more.

4️⃣ Gradual liquidation:
When the price reached the peaks, whales gradually started selling to new traders without suddenly affecting the price.

5️⃣ Collapse:
Once the liquidity coming from new traders ran out, the price started a sharp decline, with XRP gradually collapsing from $3.84 to less than $0.3 over the course of a year.

🔹 Result:
• Whales exited with huge profits.
• Small traders stuck at the peaks, waiting for a new cycle that could take years to recoup their losses.

Lesson:
Liquidation happens with well-thought-out plans: raise the price, spread positive news, attract liquidity, and then gradually exit. The market is a big game, and you should always be careful!”