Retail Investors' "Disaster Area": Why are PNUT, BOME, NEIRO, and ACT the most trapped?
Recently, the market has been tumultuous, and retail investors have taken a huge hit on some popular small cryptocurrencies. PNUT, BOME, NEIRO, and ACT have become the deepest "disaster areas" for being trapped. Why have these cryptocurrencies trapped retail investors so badly? Let's discuss it in detail.
1️. The "High Position Pitfall" of Popular Cryptocurrencies
Why are these cryptocurrencies able to attract retail investors? It's mainly because they surged in price initially, making people envious. When retail investors see the price soaring, they rush in to chase the highs. As a result, when the main investors pull out, the price immediately plummets, leaving retail investors as the ones holding the bag:
PNUT: A niche project with poor liquidity. When it rises, retail investors chase after it, but when it corrects, no one is there to take over, and they can't escape even if they want to.
BOME: Gained popularity through marketing and hype, but when the excitement fades, the funds leave faster than a rabbit, leaving retail investors hanging high and dry.
NEIRO: The concept sounds good, but it has no practical application. Once the hype dies down, it falls horribly, trapping retail investors tightly.
ACT: Was quite popular in the early days, attracting a rush of retail investors. But once the high point was reached, there were no funds to take over, leaving a large number of investors trapped.
2️. Why are retail investors always trapped?
Chasing Highs Mentality: Retail investors always think about getting rich quickly, and when they see a cryptocurrency rising, they rush to follow. When the main investors sell off, they are instantly trapped.
Poor Risk Management: Retail investors often don't know to cut losses in time; when the price corrects, they hope for a rebound to break even, but they end up getting trapped deeper.
Delayed Information: Retail investors receive information slowly and of poor quality. By the time they realize that the main funds have fled, it's already too late.
3️. The Main Investors' "Cutting Leeks" Tactics
With these cryptocurrencies being trapped, the main investors have certainly played some tricks:
First, they pump up the price to attract attention: They quickly raise the price and then heavily promote it, making retail investors envious and eager to chase.
High Position Selling and Dumping: Once there are many retail investors, the main investors start to sell off, making a hefty profit while leaving retail investors standing guard at high prices.
After Washing the Market, They Buy Back: Once retail investors are deeply trapped, the main investors buy back at low prices, preparing for the next round of harvesting.
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