Recently, the market has experienced turmoil, and retail investors have taken a big hit on some popular small cryptocurrencies, with PNUT, BOME, NEIRO, and ACT being the most severely trapped areas. Why have these cryptocurrencies caused such severe losses for retail investors? Let’s discuss it thoroughly.
1️⃣ The 'high position pit' of popular cryptocurrencies
Why can these cryptocurrencies attract retail investors? Isn’t it just because they had a sharp rise earlier, making people envious? When retail investors see the price skyrocketing, they rush to enter. As a result, when the main force withdraws, the price plummets, and retail investors become the ones left holding the bag.
PNUT: A niche project with poor liquidity. Once it rises, retail investors rush in, and when it pulls back, no one takes over, making it impossible to escape.
BOME: Became popular through marketing and speculation, but once the heat fades, the funds run away faster than a rabbit, leaving retail investors hanging high.
NEIRO: The concept sounds good, but it has no real application. Once the hype passes, it drops severely, leaving retail investors deeply trapped.
ACT: It was quite hot in the early stages, attracting a rush of retail investors. However, once the high point was sold off, there were no funds to continue, trapping a large number of investors.
2️⃣ Why are retail investors always trapped?
Chasing gains mentality: Retail investors always think about getting rich quickly, and when they see a cryptocurrency rising, they rush in. When the main force dumps, they are instantly trapped.
Risk management is inadequate: Retail investors often do not understand when to cut losses; when the price pulls back, they hope for a rebound to break even, but end up getting trapped deeper.
Information lag: Retail investors obtain information slowly and of poor quality. The main funds have already run away, while retail investors are still there foolishly happy, and by the time they realize something is wrong, it's already too late.
3️⃣ The main force's 'cutting leeks' trick
These cryptocurrencies are trapped, and the main funds have certainly done their part in creating trouble:
First, raise the price to attract attention: Rapidly increase the price, then promote it widely, causing retail investors to become envious and excited, and follow the trend to chase gains.
High position dumping: When there are too many retail investors, the main force starts to sell, making a fortune while leaving retail investors standing guard at high positions.
Repurchase after washing: Wait until retail investors are deeply trapped, then the main force buys back at a low price, preparing for the next round of harvesting.
4️⃣ How to avoid being trapped?
Don't blindly chase gains: Cryptocurrencies that rise sharply also carry high risks. Don’t rush to chase highs just because you fear missing out.
Set stop-loss points: Before entering the market, think clearly about what price level to set for stop-loss. Don’t wait until you are deeply trapped to regret it.
Pay attention to the flow of funds: When there is any sign of movement from the main funds, retail investors must adjust their strategies accordingly. If the main force has run, we cannot increase positions against the trend.
Diversify investments: Don’t put all your eggs in one basket, especially with those small cryptocurrencies that have high volatility.
5️⃣ How will the market trend in the future?
The cryptocurrencies PNUT, BOME, NEIRO, and ACT may remain sluggish in the short term because the main force has withdrawn, and no one is taking over.
Some cryptocurrencies may rebound after washing, but it depends on trading volume and market sentiment. Don't rush to add positions; wait until the trend is clear.
To summarize:
PNUT, BOME, NEIRO, and ACT have become the 'heavily trapped disaster areas' for retail investors, influenced both by the reasons of retail investors themselves and the tricks of the main funds. To navigate the market, one must always stay clear-headed and not be misled by those highly volatile small cryptocurrencies. Controlling risk is the long-term strategy.
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