Beware of cunning "whales"
In the turbulent ocean of cryptocurrency, "whales" with huge capital often secretly manipulate the market for their own benefit, putting us small traders at a disadvantage. How do they do it?
1. Bait-style breakthrough: Whales are good at creating false price fluctuations to attract us to enter the market. They deliberately push the price above a certain important resistance level, inducing us to mistakenly believe that the market is about to break through, and then blindly chase the rise. However, once we enter the market, they quickly sell their chips, causing the price to plummet, catching us off guard.
2. Panic selling: Whales are also good at taking advantage of people's panic psychology. They will sell a large number of tokens in a short period of time, creating market panic and causing prices to fall sharply. Many traders may trigger stop loss points in this case, resulting in forced liquidation. And whales will buy back tokens at a lower price when the price hits the bottom, making huge profits.
3. Liquidity hunting: In the cryptocurrency market, areas with high liquidity often hide huge risks. Whales will look for these areas and place a large number of stop-loss orders in them. Once the price hits these areas, it will trigger a large-scale sell-off, causing panic in the market to spread. And whales will take the opportunity to snap up cheap tokens to further expand their own interests.
In order to protect ourselves in this game with whales, we need to do the following:
Stay alert: Always pay attention to market dynamics and the movements of whales so that we can adjust our trading strategies in time. Set stop losses reasonably: Avoid setting too narrow stop loss points in areas with high liquidity to avoid being affected by the manipulation of whales. Diversify the entry: Don't invest all your funds in the market at once, but diversify the entry to reduce risks.
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