What is 'Whale Manipulation'? Why are most people losing money by following?

In the ocean of cryptocurrency, there are some 'big fish'—also known as 'whales'—who stir up waves with their massive assets. They can easily sway coin prices through large-scale buying and selling, making a fortune in the process. Because the liquidity in the crypto market is low, when whales make a move, it often triggers massive price drops or surges, attracting small investors to follow suit, only for the whales to come out on top in the end!

What tricks do whales commonly use?

1. Large buy and sell: Buying or selling a large amount of coins at once, instantly raising or lowering the price. The little guys panic at the price fluctuations, while the whales take the opportunity to buy low and sell high, profiting effortlessly.

2. Pretending to be busy: Whales will fill the order book with buy or sell orders in a certain price range, creating a false sense of support or pressure. Once the market bites, they immediately cancel their orders, leaving everyone flustered.

3. Flash trading: Rapid buying and selling in a short period, causing a flash crash or surge in price. Especially when everyone is emotionally vulnerable, whales thrive and make merry.

4. Pump and dump: First, they buy a large amount of a coin, heating up the market and attracting retail investors. Once the price skyrockets, the whales suddenly sell off, causing the price to plummet, leaving latecomers with losses.

Why do most people lose money?

1. FOMO and panic: Whales drive up the price, triggering the 'fear of missing out' emotion. Everyone rushes to buy in, and the whales take this opportunity to sell, causing the price to crash, and retail investors to lose money.

2. False support and resistance: Large pending orders mislead everyone into thinking there is support or pressure at certain price levels, only for the whales to cancel their orders, trapping traders.

3. Fake trading volume: High trading volume appears to indicate a strong market, but in reality, it’s an illusion created by whales to mislead everyone’s judgment.

How to avoid falling for whale tricks?

1. Diversify investments: Don’t put all your eggs in one basket; diversify your investments to reduce risk.

2. Stay calm: In the face of extreme volatility, don’t let emotions take over. Analyze rationally and don’t blindly follow the crowd.

3. Keep an eye on trends: Use tools to monitor market capital flows and pay attention to the movements of large investors to identify risks early.

4. Choose reliable platforms: Select regulated and transparent platforms, as these are less susceptible to manipulation by large investors, ensuring the safety of your investments.