This is when small market participants become an opportunity for larger players to exit their position profitably.
In other words:
You buy from someone who already “knows everything” — and now you're left with what they wanted to get rid of.
📽 Example from real life (and from the movie):
🎬 Movie: “The Big Short” / The Big Short (2015)
Scene: The main character (Michael Burry, played by Christian Bale) predicted the collapse of the mortgage bond market in the US and bet millions of dollars on it.
When the market has already started to collapse, he finally sees that his bets are beginning to pay off and wants to exit the position.
But! 💣 A problem arises: no one to sell to — the market has collapsed, there's no liquidity, panic. At this moment, he needs to find someone who still believes that the price will go up to offload his positions.
💡 This is the question of exit liquidity — can you find enough “buyers” to exit the asset without crashing the price immediately?
📊 Example in the crypto market:
Suppose the altcoin $XYZ is being accumulated by “whales”. Then:
• They start flooding social networks with positivity, charts, and supposed insider information.
• The market believes, the price is flying 🚀, and meanwhile, the whales start dumping their positions.
• Retail buyers (you and me) are that very exit liquidity. We buy at the highs, thinking it’s just getting started.
As a result — Dump 💥, and the large holders are already out, whistling.
🎯 Conclusion:
Exit liquidity is you, if you're not timely.
🧠 Learn to identify moments when assets “stop gaining” and are simply “dumped on the crowd” — and don’t be that shoulder for someone else's exit.
