The dealers in the cryptocurrency circle include market makers, teams holding a large number of currency chips, project parties, and even exchanges. More often, multiple interest groups jointly operate the dealers. After all, it is difficult for one party to pull up or smash the market. The dealer's process is roughly as follows: analysis, position building, trial trading, consolidation, initial rise, wash trading, pull up, shipment, rebound, smash, and then repeat. However, not every process is indispensable, and different dealers have different trading methods.
1. Preparation
Before getting involved in a currency, the dealer or market maker will collect all-round project information, accurately count the total amount of chips and unlocking status, find out the costs of investors at all levels, the degree of chip dispersion, and evaluate the community's popularity. Based on the collected information and the scale of funds available to mobilize, they will set a target for pulling the price.
2. Positioning Stage
Before building a position, the dealer will deeply research market sentiment, BTC market trends, macroeconomic environment, and policy risks. Typically, they will enter the market when sentiment is pessimistic, retail investors' confidence is shaken, and the outlook for the coin is not optimistic, hence the saying 'When retail investors are fearful, I am greedy.'
Depending on the dealer's strength, the percentage of holdings varies. Short-term dealers can control 10% - 30% of the chips to operate, while long-term dealers often need to hold over 40%. If it is a meme coin, the dealer usually needs to hold over 80% of the chips to raise the price. Generally speaking, dealers do not accumulate at high prices. Common methods of building positions include:
- Negative news for accumulation: Using negative news from the crypto world, such as technical failures of projects, rumors of regulation, etc., to suppress the price of coins, triggering panic selling, and taking the opportunity to accumulate at lower levels.
- Short-selling trap: Creating a false impression of downward price movement through technical means to lure retail investors into selling, while the dealer buys in at lower prices.
- Large-scale buying: Concentrated capital buying in a short period to push up trading volume and attract follow-on investors, quietly collecting chips.
- Rebounding stockpiling: In the rebound stage after a price drop, gradually buying in, taking advantage of investors' desire to break even or take profits to expand holdings.
- New project ambush: When associated projects have significant technical upgrades, new scenarios, or expectations of strategic cooperation, they will layout in advance.
3. Testing Stage
During this stage, the dealer will slightly raise or suppress the coin price, observing market buy and sell orders, transaction volume, and investor sentiment, to understand information such as chip locking, the strength of follow-on buying, and resistance/support levels, in order to adjust trading strategies. However, testing the market is not essential; some experienced and keen dealers may directly raise prices or take other actions, and the timing of testing is flexible, occurring throughout the entire process of sitting in control.
4. Consolidation and Fluctuation Stage
Consolidation aims to optimize chip structure and accumulate upward energy, categorized into low, medium, and high-level consolidation based on price position. The price trend usually alternates between rising, falling, and consolidating. Consolidation takes a long time, with smooth fluctuations and unclear direction, testing investors' patience. The dealer uses this to consolidate holding costs, clean up floating chips, and wait for the opportunity to rise.
5. Initial Rising Stage
After completing preliminary preparations, the dealer launches an initial rising trend, moderately raising the coin price to attract market attention and stimulate outside capital to enter, reducing subsequent resistance to further increases. However, to avoid revealing intentions too early, the initial rise is limited, after which the price will slightly retrace to clean up profit-taking positions and unstable chips, laying a solid foundation for future rises.
6. Cleaning Stage
After accumulating a certain amount of chips, the dealer will suppress the price to drive away follow-on investors and force early holders to sell. This can absorb more chips at low prices, lower costs, eliminate weak-willed retail investors, and reduce selling pressure for future rises, creating conditions for high-price selling.
7. Rising Stage
After preliminary accumulation, testing, and cleaning up positions, both long and short sides reach a certain degree of consensus. Once the dealer controls a large number of chips and stabilizes the situation, the price naturally rises. In the rising phase, the price quickly climbs, and the dealer uses market excitement, technical indicators, and positive news to attract investors to follow in buying, pushing the price to new highs for profit.
8. Selling Stage
As the saying goes, 'Knowing how to buy is a novice, knowing how to sell is a master.' Selling off is key to sitting in control; only by successfully distributing chips can book profits be converted into actual gains. Therefore, dealers will create a false appearance of market prosperity, using media to guide public opinion, creating an active atmosphere through false trades with associated accounts, enticing retail investors to take over.
9. Rebound Stage
After the price of the coin falls, a brief rebound often occurs. The dealer sells off, causing the price to drop near the profit line. Due to some investors' 'bottom-fishing' psychology and their need to sell off remaining tokens, the price may be slightly raised to create a rebound. However, this is often short-lived, and after the rebound, the price is likely to continue falling, even reaching new lows. Investors who rashly 'catch the bottom' may get trapped, and some targets may not have a rebound process.
10. Dumping Stage
- Passive selling: Encountering sudden negative news, such as technical vulnerabilities, disputes with project parties, or sudden policy changes that trigger a panic selling wave, the dealer may dump the price to reduce losses, or abandon the position, or after dumping, buy in at low prices to regain control.
- Dumping after high-level sales: The dealer sells off at high levels to lock in profits, with the remaining small amount of chips being inconsequential. Dumping can suppress the price to lay out plans for subsequent low-cost accumulation without considering market image or costs.
- Dumping for a new trend: After a round of speculation ends, the dealer uses the remaining tokens to dump the price, creating a bearish atmosphere to induce investors to sell off, testing market bottoms and investor psychology, laying the groundwork for a new trend and starting a new round of harvesting.
Regardless of the type of dealer, building positions, rising, and selling are the basic 'three movements' of sitting in control. Investors should often think from the main force's perspective about trading intentions; after all, although the crypto market changes in terms of segments, prices, and participants, human nature remains unchanged.