In the cryptocurrency market, large investors usually use the following methods to dump the market:
1. Large orders crash the market
This is one of the most common ways of dumping the market, that is, investors or institutions holding a large amount of Bitcoin or other cryptocurrencies sell a large amount of assets in a short period of time, causing market panic by lowering prices, thereby achieving the purpose of manipulating the market. Especially in the market with low liquidity, the selling orders of large investors are more likely to have a greater impact.
Large orders tend to be market price dumps. This is because large orders are usually measures taken by institutions or major funds to quickly suppress prices. They will quickly sell a large number of currencies at the current market price in the market, thereby achieving the purpose of quickly suppressing prices.
The characteristic of market orders is that they are executed immediately at the current market price, which is consistent with the operation mode of large orders. In contrast, limit orders need to be executed within a specific price range, which does not meet the needs of large orders to quickly suppress stock prices.
There are no signs of a market crash, and the coin price responds quickly. To track whether large investors are operating large orders to crash the market, you can use AICoin's (aicoin.com) large transaction tools to track.
The large transaction indicator can track the main market transaction situation and capture the trend of large investors dumping the market.
Take the Binance BTC/USDT spot currency pair as an example:
Starting at 12:00 on December 16, Binance spot traders dumped the market price, cumulatively selling $56.51 million, causing BTC to fall back by more than 3.8%. During this period, long traders tried to resist, and the resistance gradually increased, with a total of $20.04 million in buy orders. However, the buyer's power was far less than the market-smashing power, and failed to successfully prevent the price from falling.
BTC got support when it fell to the 61.8% Fibonacci retracement level, and then fluctuated and adjusted. The main bulls and bears began to play games, constantly buying and selling at the market price, and the difference in the total transaction amount was only 1.16 million US dollars. During this period, BTC formed a double top and stepped back to the 95,500 support again. Until 04:05 on the 27th, the bulls began to gain the upper hand, and the low point of BTC gradually rose, and began to slowly warm up.
Note: Green circles represent market buy orders, and red circles represent market sell orders. Experience now: https://www.aicoin.com/vip
Therefore, when the price shows signs of falling back, you can use the large transaction tool to judge the strength of the main force's market smash. In addition, the large transaction indicator can also be used to identify the real intention of on-chain transfers. For details, please see: (Editor's sharing: Mt.Gox address frequently changes, how to identify "smoke bombs"?)
2. Limit Orders
Large investors may place large limit sell orders to guide prices downward. When the market approaches the price of these sell orders, there may be a large amount of follow-up selling, causing prices to fall further.
The main force's behavior of smashing the market through limit orders can also be tracked with the help of AICoin's large order transaction tool.
The main force's large orders track the order behavior of large investors. Once the main force places an order on the market, AICoin can capture it immediately, and can know the main force's order position, direction and amount, and finally display it on the K-line, which is very clear.
When the main force places a sell order, we can make two waves of manipulation.
• Before a large order is executed: in a short period of time, the direction is opposite to that of the main order. For example, if the current price of BTC is 95,000, and a large trader places a sell order of more than 10 million US dollars at 98,000, then we can buy first and follow the large trader to sell when the price rises to 98,000. This operation benefits from the attraction of large orders. According to AICoin analysis, the position of the main order is generally the position that the subsequent price will reach.
• After the large order is executed: operate in the same direction as the main pending order. If the order is a sell order, take profit/open a short position; if the order is a buy order, close a short position/buy spot.
In summary:
• Main force buy order: before the transaction, bearish (price must fall back before the buy order can be executed); after the transaction, bullish (support).
• Main selling order: before the transaction, bullish (price must rise before the sell order can be executed); after the transaction, bearish (pressure).
In addition, the main methods of market smashing include waterfall-style market smashing, inertial market smashing, short-selling market smashing, pulling up and selling, information manipulation, etc. Among them, the behavior of pulling up and selling can be identified through volume price analysis or OBV indicators. For details, please read: (OBV advanced application, help you judge the trend, escape the top and buy the bottom!)
Special reminder: After the main force smashes the market, the price will fall sharply and may rebound near the technical support level. At this time, large investors may choose to buy again at a low level. Specifically, you can use the aforementioned [Large Amount Transaction] and [Main Force Large Order Tracking] indicators to capture the main force's behavior.
The content is for sharing only and for reference only and does not constitute any investment advice!
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