Most traders who lose money do so because they chase trends and blindly operate based on charts. I used to do this too — until I figured out this method called 'liquidity trap.' Since then, I stopped looking at those technical indicators and focused solely on the movements of big funds. This one change made all the difference.
What is a liquidity trap?
It's actually quite simple: identify those whales and institutions secretly pouring money into small-cap tokens. Usually, retail investors panic when they see prices drop, but these big funds keep buying. If you can spot them doing this early, you can secure a position before the price skyrockets.
My three-step method:
Step one, on-chain tracking. I use blockchain scanning tools to monitor the large flows of stablecoins (like USDT, USDC) into altcoins. This reveals where the 'whales' are investing their money.
Step two, find the buying point. I never chase after prices that just started to surge. Instead, I wait for whales to make their move and then buy when the price drops by 20%-30%. At that time, retail investors are panicking and selling, which is the best buying opportunity.
Step three, set profit targets. I set a clear target, usually aiming to earn 5 to 10 times. Since the main drivers of price increases are these whales, the rises are usually quite strong.
How effective is it?
I made my first big profit with a small game token. After noticing a $2 million whale entering the market, I waited for the price to drop a bit before jumping in, and within two weeks, it multiplied by 50 times. My initial investment of $1,000 turned into $50,000.
This is not some financial advice — it's just a method that works for me. It focuses on the real signals in cryptocurrency: the flow of funds, not those charts.
#ETHInstitutionalFlows #StrategyBTCPurchase #MarketPullback
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