Why do bear markets often occur in bull markets?
This is mainly due to violent market corrections.
In a bull market, retail investors tend to have higher loyalty and stickiness. If there are no sharp declines, it is difficult to flush them out of the market. Sometimes, it even requires consecutive sharp declines to make most retail investors sell off and leave.
Some may ask, why is it necessary to flush out retail investors?
Isn't it good for everyone to make a profit in the crypto space together?
In fact, it is not the case. In the absence of new funds flowing into the crypto space, if retail investors are not flushed out, the main players will need to spend a lot of money when pushing up the coin prices.
Because during the upward process, once retail investors make a profit, they will choose to exit, which greatly increases the resistance faced by the main players, as if the main players are "carrying the sedan chair" for the retail investors.
However, if retail investors are flushed out through sharp declines and other means, once they all sell at a loss, the main players can not only achieve profits but also benefit from further increasing the coin prices later on.
In summary, the reason for the frequent sharp declines in bull markets lies in the high stickiness of retail investors.
Therefore, if operational strategies are not appropriate during a bull market, the losses faced by retail investors may be even more severe.
