My cousin's recent performance in the crypto circle has been full of ups and downs; seeing the market fluctuate wave after wave, he mistakenly thought normal selling operations were a washout.
As a result, being overly aggressive with 💰200 in entry led to complete losses! A painful panic is simply a ruthless mockery of market rules.
Many friends often mistake the main force's selling for a washout; selling and washouts can sometimes look very similar. Both are methods used by the main force during operations and may accompany price fluctuations.
For ordinary people, it is difficult to accurately judge the true intentions of the main force. During the trading process, retail investors often can only guess based on market performance, while the main force can mislead retail investors through various means.
Let's compare the two together:
🌰Characteristics of selling: When the dealer sells, they do not place large sell orders on the sell side, while buy orders below are larger, showing a significant commission ratio.
This creates a false impression of a lot of buying pressure for retail investors, but at a certain price level above, there are endless supplies, or large sell orders often appear in the transaction details, while buy orders are weak, causing prices to sink and unable to rise.
🌰Washout characteristics: There are large sell orders on the sell side, creating a false impression of abundant selling pressure. At key price levels, there are large sell orders, while buy orders are few but come in quickly and in many transactions, stopping the price from falling further. After opening at the expected price level, when the dealer sees large sell orders, they absorb them, reducing the selling pressure above; when they see large buy orders, they sell, forming a turnover.
This back-and-forth shaking can help clear floating chips. So, during this stage, although there are always large orders being executed, the price neither falls nor rises, maintaining a balanced state.
🙊Washout, K-line shows obvious layering; certain key price levels will not be breached, and the trading volume cannot be amplified during declines, while trading volume gradually increases during rises. Accompanied by significant fluctuations, the trading volume shows no clear rules but has a decreasing trend. The center will not move down.
🙊Selling out, K-line price levels are out of control, lacking any structure, and just continuously falling. The rising phase is short, with no increase in volume, while trading volume significantly increases during declines. Moreover, the center keeps moving downwards.
❗During a washout, the main force often reduces volume during declines and increases volume during rises because they only want to use a small number of chips for the washout and do not want retail investors to pick up cheap chips.
❗The opposite happens when selling; when prices drop, volume increases, and when prices rise, volume decreases. The main force sells off chips quickly during a downturn, while during an upturn, they only want to attract retail investors to follow suit, resulting in lower trading volume.
Therefore, when we analyze the situation of coins, we cannot only look at the K-line; we must comprehensively consider multiple aspects.
CC hopes this article can help everyone and serves as a lesson.
㊗️㊗️Everyone buys whatever flies!!