Revealed! The Full Process of How Market Makers Harvest Retail Investors in the Cryptocurrency Space
I. Preparation Stage
Before the market maker intervenes, they comprehensively collect data on the total amount of tokens, unlocking status, investor costs, chip distribution, and community sentiment, and then determine the target for price manipulation based on available capital.
II. Position Building Stage
- Entry Timing: Act during market downturns when retail investors are pessimistic.
- Holding Proportion: Short-term market makers control 10% - 30% of the chips, while long-term market makers hold over 40%.
- Position Building Techniques: Accumulate during negative news, create trap for selling, buy in large volumes, stock up during rebounds, and prepare for new projects.
III. Trial Trading Stage
Make small-scale price increases or decreases to observe market buying, selling, trading volume, etc., to assess chip locking and the strength of following market trends, though this step is not mandatory.
IV. Consolidation Stage
Optimize chip structure and build energy, consolidating at low, medium, and high levels. The price fluctuates gently, wearing down retail investors' patience while the market maker cleans out floating chips.
V. Initial Rising Stage
Moderately increase prices to attract attention, stimulate capital inflow, then slightly pull back to clean out profit-taking positions while avoiding revealing intentions.
VI. Washout Stage
Suppress the price to drive away following investors, forcing early holders to sell, reducing costs, and minimizing selling pressure during subsequent rises.
VII. Price Surge Stage
Rapidly push up the price, leveraging market enthusiasm and good news to attract follow-on buying and achieve profits.
VIII. Selling Stage
Create a facade of prosperity, guide public opinion, and use false trading methods to entice retail investors to buy, realizing profits from the paper gains.
IX. Rebound Stage
After a price drop, a brief rebound occurs, triggered by retail investors “bottom-fishing” and the selling demand of remaining chips from the market maker, often leading to a short-lived market that can easily trap those who rush to bottom-fish.
X. Dumping Stage
Due to sudden negative news, passive selling occurs, or after high-level selling, the market maker intentionally dumps the price to suppress it for subsequent accumulation, starting a new round of harvesting.