Although the bull market seems prosperous, have you noticed that there are occasional waves of crashes? Don't worry, this is not a market collapse; rather, "washing" is quietly taking place!
🌪️ Why are there frequent crashes in a bull market?
Many friends may ask: "Shouldn't a bull market be all about rising? Why are there still frequent crashes?" In fact, these crashes are not market collapses, but rather the market is "cleaning out" retail investors!
In a bull market, many retail investors follow the trend to buy in, holding their coins with a particularly strong mindset and high trading stickiness. If a portion of them is not washed out through crashes, the main forces would need to spend a lot of capital costs to raise coin prices, as retail investors will quickly sell off once they make some profits, leading to immense market pressure.
🔥 What does "washing" actually mean?
In simple terms, the main forces use crashes to force retail investors to cut their losses and exit. Once these retail investors are gone, only the main large funds remain in the market, allowing them to easily control coin prices, further increase them, and reap significant profits.
Conversely, retail investors are eliminated in this process, becoming the "sacrificial victims" of the market.
💰 Why clean out retail investors?
It sounds a bit cruel, but this is the brutal game of the market. Without this wave of "washing," the main forces would face enormous resistance when pushing up coin prices. Once retail investors earn a little money, they choose to exit, resulting in the main forces losing all the money they could have made when raising prices to retail investors.
Therefore, by cleaning out retail investors through crashes, the main forces can not only increase their profit margins but also make subsequent price increases smoother.
🎯 To summarize:
So, when you see waves of crashes in a bull market, don't rush to panic. This is likely the market preparing for a wash and for subsequent price increases.
And those steadfast investors who can resist selling often earn more in the subsequent stages.