Analysis → Opening a position → Testing the market → Consolidation → Initial rise → Cleaning the market → Pulling up → Selling → Rebounding → Smashing the market → Reincarnation cycle...
A complete analysis of the banker’s process:
1️⃣ Preparation stage
Before the dealer starts to intervene in a certain currency, they will collect all kinds of information about the project, including the total amount of chips, accurate statistics on unlocking status, the cost of investors at all levels, chip dispersion, community popularity assessment, etc. After collecting information, they will set a pull target based on the amount of funds they can mobilize.
2️⃣Position building stage
Before building a position, the market maker will conduct a variety of investigations and research, covering market sentiment, BTC market trends, macro and policy risks, etc.
Typically, market makers choose to enter the market when the overall market is pessimistic, the market sentiment is low, retail investors are discouraged, and hold a pessimistic view of the coin's prospects. Position building is like the saying goes, when retail investors are fearful, it is when market makers are greedy.
Depending on the strength of the market maker, their holding ratio varies. A short-term market maker can control 10% - 30% of the chips to operate, while a long-term market maker often needs to grasp over 40% of the chips. Of course, this also depends on the market maker's strength. Generally, market makers do not build positions at high prices.
㊙️ The market maker's methods of building positions mainly include the following:
🔶 Accumulating on negative news: By taking advantage of negative news in the cryptocurrency market, such as project technical failures or rumors of stricter regulations, the market maker can suppress the price of the coin, triggering panic selling and thereby accumulating chips at low prices.
🔶 Inducing short traps: By using technical means to create the illusion of a downward price trend, retail investors are induced to sell, while the market maker accumulates at low prices, completing the position-building layout.
🔶 Large-scale accumulation: Concentrated capital buys a large amount of the target coin in a short period, pushing up trading volume, attracting following orders, and secretly collecting chips.
🔶 Accumulation during rebound: In the rebound stage after the price of the coin falls, gradually buy in and take advantage of some investors’ psychology of breaking even or taking profits to expand holdings.
🔶 New project ambush: When the target coin's associated projects are expected to undergo significant technical upgrades, new application scenarios, or strategic partnerships, the market maker will lay the groundwork in advance.
3️⃣ Testing Stage
In this stage, the market maker slightly raises or suppresses the price of the coin, observing market buying and selling behavior, trading volume, order conditions, and emotional fluctuations, to understand the degree of chip locking, the strength of following orders, resistance and support levels, and other key information to provide a basis for fine-tuning subsequent trading strategies.
However, testing the market is not a mandatory option. Some market makers, relying on keen market intuition and rich experience, may directly initiate a pump or take other actions, and the timing of the test can be flexible, carried out appropriately throughout the market-making process.
4️⃣ Consolidation Stage
Consolidation is aimed at optimizing the chip structure and accumulating upward energy. Depending on the price position, it can be subdivided into low, medium, and high-level consolidations. The price movements are generally alternating between rising, falling, and consolidating, with consolidation occupying a large amount of time. During this stage, the price fluctuations are mild and direction is unclear, testing the patience of investors. The market maker uses this opportunity to consolidate holding costs, clean up floating chips, and wait for the chance to pump. This stage often tests the patience of retail investors the most, as the price movements can be quite annoying.
5️⃣ Initial Rising Stage
After completing the preliminary groundwork, the market maker initiates the initial rising trend, moderately raises the price of the coin, attracts market attention, stimulates enthusiasm for external funds to enter, and reduces subsequent resistance to the rise. However, to avoid prematurely revealing intentions and attracting following orders and regulatory attention, the initial rise is limited, followed by a slight price drop to clean up profit-taking and unstable chips, laying a solid foundation for subsequent steady rises.
6️⃣ Washing Stage
After accumulating a certain amount of chips, the market maker will adopt a price suppression strategy to drive away following orders and force early holders to sell. This can absorb more chips at low prices, reduce holding costs, eliminate weak-willed retail investors, and reduce subsequent selling pressure during the pumping phase, creating conditions for high-priced sales.
7️⃣ Pumping Stage
After a series of operations such as accumulation, testing the market, and washing out weak hands, both bulls and bears have reached a high degree of consensus. Once the market maker controls a large number of chips and stabilizes the market situation, the price of the coin rises naturally. In the pumping stage, the price of the coin rises rapidly, as the market maker cleverly uses factors such as market enthusiasm, technical indicators, and favorable news to attract more investors to follow suit and buy in, pushing the price of the coin to new highs and achieving substantial profits.
8️⃣ Selling Stage
As the saying goes, 'Knowing how to buy makes you a novice, knowing how to sell makes you a master.' Selling is the key objective of market makers. Successfully distributing chips is the only way to convert paper profits into actual gains. Distribution is the most critical phase in the market-making process because any market maker can only convert paper profits into actual gains by successfully distributing chips.
To this end, the market maker employs all kinds of tricks, such as creating a false illusion of a booming market, using media public opinion to guide emotions, and utilizing related accounts for fake trades to create a lively atmosphere, enticing uninformed retail investors to take over, ensuring smooth selling.
9️⃣ Rebound Stage
After a price drop, a brief recovery often occurs, known as the rebound stage. When the market maker sells off and the price of the coin approaches the profit line, due to some retail investors' 'bottom-fishing' psychology and their own need to sell remaining chips, the price may be slightly driven up, creating a rebound trend.
However, this is often short-lived. After the rebound ends, the price of the coin is likely to fall again, possibly hitting new lows. If investors rashly 'bottom-fish,' they can easily fall into a trap. The rebound stage in the market-making process is a secondary stage, and some targets may not have a rebound process.
🔟 Dumping Stage
🔶 Passive selling: Encountering sudden negative news, such as major technical vulnerabilities, disputes among project parties, or abrupt changes in regulatory policies, can trigger a market panic selling wave. The market maker may be forced to dump to reduce losses. This behavior may lead to the market maker abandoning the position or seeking opportunities to accumulate at low prices after dumping, regaining control.
🔶 Dumping after high-level selling: After successfully selling off at high prices and locking in profits, the remaining small amount of chips no longer affects the overall situation. At this point, dumping can suppress the price of the coin and allow for subsequent low-price accumulation, without needing to consider market image and costs.
🔶 Dumping for a new trend: After a round of speculation ends, the market maker will deliberately dump with the remaining chips to create a bearish atmosphere, inducing investors to sell while testing the market bottom and investor psychology, laying the groundwork for the next trend. Initiating a new harvesting cycle.
Regardless of the type of market maker, it always revolves around the three stages of building positions, pumping, and selling, which are the basic 'three movements' of market makers.
Always think from the perspective of the main force and understand their trading intentions, so you can follow along and share the profits!
The cryptocurrency market is always repeating yesterday's story. The sectors being speculated on change, prices change, and the buyers and sellers change, but human nature does not change.
Let's encourage each other!