In the cryptocurrency market, which is full of opportunities and challenges, understanding the behavior patterns of market makers (large traders or institutions) is essential to developing effective trading strategies. Especially during the bull market, correct judgment can allow you to seize opportunities and avoid traps. Here are two important principles for identifying the movements of market makers to help you gain a foothold in the ever-changing market:
1. Rising fast and falling slowly – a signal from the banker to accumulate funds
When a cryptocurrency begins to slowly fall after a period of rapid growth, it is usually a sign that the market maker is "accumulating funds". The so-called accumulation of funds refers to the market maker gradually buying more coins through small price corrections, accumulating a large number of chips at a lower cost. In this case, although the price has fallen, the speed is slow and the amplitude is not large, indicating that the selling pressure is not strong and the market sentiment is still optimistic. At this time, if you believe that the fundamentals of the currency are good, it may be a wise choice to follow the footsteps of the market maker.
Practical suggestions:
Observe the changes in trading volume. If the trading volume increases during the price rise and decreases during the correction phase, this further confirms the possibility of the market maker accumulating funds.
Be patient and wait for the best time to enter the market. Don't rush to chase high prices, but look for appropriate low entry points.
Set a stop loss just in case. Even the most favorable trend can reverse, and setting a stop loss properly is an important part of risk management.
2. Falling fast and rising slowly - warning of dealer selling
On the contrary, when a currency falls rapidly and then only recovers slowly, it often indicates that the market maker is "selling out". That is, the market maker is taking advantage of every small rebound to sell a large number of tokens in his hands, causing the overall price trend to go down. In this case, even if there is a short-term price rebound, it is difficult to form a sustained upward momentum because there is a lack of sufficient buying support in the market.
Coping strategies:
Be prepared to reduce your position in advance. Once you find that the price starts to fall rapidly and then rebounds weakly, you should consider reducing your position appropriately.
Watch the market sentiment. Changes in attitudes about the project on social media, negative news reports, etc. can be warning signs of a shipment.
Avoid blindly buying at the bottom. Even if you think a currency is undervalued, please wait for clear technical reversal signals before making a decision.
In short, by carefully analyzing the price change pattern and the possible operating logic behind it, we can more accurately judge the market situation and make more reasonable investment decisions. Of course, no method is absolutely reliable, so it is equally important to maintain a learning attitude and constantly sum up experience and lessons. I hope the above sharing can help you ride the wind and waves and achieve good results in the next bull market journey!
