A sudden spike and drop in the market can often be due to whale traps, where large investors manipulate prices for their benefit. Here’s how it usually unfolds:
1. **Price Surge**: Whales buy up a large quantity of cryptocurrency, driving the price up rapidly. This creates FOMO (fear of missing out) among other investors, leading them to buy in as well.
2. **Price Crash**: After the price reaches a peak, the whales begin to sell off their holdings at the inflated prices. This triggers a sharp decline in the market, leaving smaller investors with losses.
Whale traps take advantage of market volatility and traders' emotions, allowing big players to profit at the expense of smaller ones.
