Get ready to understand one of the harshest moves in the market!
1. Silent accumulation:
Large investors (whales) discreetly buy large amounts of an asset at low prices.
2. Hype or Inflated Phase:
A wave of enthusiasm is generated on social media, forums, or news to attract retail investors. The price starts to rise… and everyone wants in!
3. Peak of euphoria:
Retail investors buy en masse. The price skyrockets, generating FOMO (fear of missing out).
4. Mass sell-off – the DUMP:
Whales sell their assets all at once taking advantage of the liquidity generated. This causes a sharp drop in price.
5. Panic and loss:
Small investors panic and sell at a loss. The market collapses. The whales are already out… with profits.
Advice from this humble servant!
Don't buy based on emotions, buy with information! Analyze the volume, activity, and history of the asset before making decisions.
