Many people have a deeply rooted misunderstanding of the house's plate washing behavior in the cryptocurrency circle, always thinking that the house crashes the market and washes the plate just to grab the tokens from retail investors. But in fact, the core purpose of plate washing goes far beyond this — it is more about reducing selling pressure and lowering operating costs during the subsequent rising phase, ultimately achieving smooth high-level offloading and cashing out. Today, I will use a simple example to thoroughly explain the house's plate washing logic in the cryptocurrency circle.
Assuming a certain capital team (commonly known as 'the house') has set its sights on a small market cap cryptocurrency called 'XX Token'. After research, they found that this token has a total issuance of 10 million pieces, and the current circulation price on the exchange is stable at around 1 dollar. The project's popularity is low, and the retail investors' holdings are dispersed, making it very suitable for control.
The first step for the house is to build a bottom position: they use multiple anonymous wallets to disperse their purchases, quietly acquiring 5 million pieces at around 1 dollar — at this time, they have already controlled half of the circulating supply and possess price control capability. However, if they raise the price directly, the remaining 5 million retail investor chips might hold back from selling, and there would be few high-priced buyers. If they raise it to 2 dollars, there would be no one to buy, and they wouldn't make much profit. But if they chase the price up, they will raise their own cost. Therefore, the key operation of 'washing the plate' comes into play.
The core gameplay of the house's plate washing: using 'panic' to exchange 'low-cost chips + low selling pressure'.
The essence of plate washing is that the house uses 'artificially induced panic through price drops' to force retail investors to hand over cheap chips, while completing 'chip exchange' — exchanging uncertain retail investor chips for their own or for 'determined chips' willing to hold long-term, paving the way for subsequent rises. Common plate washing tactics in the cryptocurrency circle are simply these few:
Inducing empty plate washing: the house first uses anonymous accounts to place a large number of sell orders at the sell one level, crashing the coin price from 1 dollar to 0.95 dollars, then uses another account to 'buy their own orders'; the next day, they continue to crash it to 0.9 dollars, and after several repetitions, retail investors see the continuous drop in price, worried about further breakdown, and start to sell off, while the house quietly buys at low prices.
Oscillation plate washing: after crashing to 0.9 dollars, the house no longer crashes deeply but allows the coin price to oscillate between 0.85 and 1 dollar — a slight rise makes retail investors think there will be a rebound, a slight drop makes them fear being trapped. After a few days of this, impatient retail investors will give up their chips, allowing the house to accumulate.
Negative news plate washing: this is the most commonly used tactic in the cryptocurrency circle — the house collaborates with social media to fabricate 'negative news': for example, 'the project party misappropriates funds', 'the exchange will delist this token', 'regulation will strictly investigate this track', combined with a large number of sell orders to directly crash the coin price to 0.6 dollars. At this moment, retail investors are completely panicked, fearing that the token will become an 'air token', and they all sell off, while the house frantically buys in the 0.6-0.8 dollar range.
Digging pit plate washing: after the negative news, the house first allows the coin price to slowly rise to 0.9 dollars, making retail investors think 'the negative news has subsided', then suddenly dumps a large order, instantly crashing the coin price to 0.7 dollars — this 'deep V pit' will scare away the last group of observing retail investors. Once retail investors sell off, the house quickly raises the coin price back to 0.9 dollars, completing the final round of accumulation.
After a series of operations, the house's tokens increased from 5 million to 8 million, while the average cost dropped to around 0.8 dollars. They not only acquired more chips but also exchanged the originally '1 dollar cost retail investors' for '0.8-0.9 dollar cost retail investors' — during subsequent rises, the profit space for these retail investors becomes smaller, thus significantly reducing the selling pressure.
The real purpose of plate washing: not just 'grabbing chips', but also 'to be able to offload'.
Many retail investors do not understand: the house clearly has price control capabilities, so why not directly raise the price but spend time washing the plate? The answer is simple — directly raising the price is 'suicidal operation', only washing the plate can establish the closed loop of 'raising - offloading'.
If they don’t wash the plate and directly raise the price, they will face three fatal problems:
Withholding chips and few high-priced buyers: if the coin price rises directly from 1 dollar to 2 dollars, retail investors’ chips will have a floating profit of 100%, and they will tend to hold onto their positions (the mentality of 'lying flat and withholding' is even more severe in the cryptocurrency circle than in the stock market); meanwhile, retail investors observing from the sidelines feel 'it has risen too much and dare not buy', making it difficult for the house to offload.
Concentrated selling pressure, making the cost of raising the price extremely high: once the coin price stops rising, the floating profit chips held by retail investors will be dumped all at once, and the house, to avoid a collapse, can only buy back using real capital, thus trapping themselves at high prices.
Lack of liquidity, making it impossible to cash out: small market cap tokens in the cryptocurrency circle inherently have poor liquidity. Directly raising prices can lead to 'volume-less increases' — while it seems that the coin price is high, a large number of chips held by the house cannot be sold, ultimately leading to 'self-promotion until the capital chain breaks and collapses'.
And plate washing just happens to solve these problems: through repeated price drops and oscillations, it can acquire low-cost chips at 0.8 dollars (reducing their cost safety net), while also raising the retail investors' holding cost from 1 dollar to around 0.9 dollars — when the price later rises to 1.5 dollars, retail investors will only have a floating profit of 60%, so they won't easily sell; when it rises to 2 dollars, new following retail investors will feel 'it just broke through the previous high, there’s still space', willing to buy, allowing the house to sell while raising the price.
The core logic of plate washing in the cryptocurrency circle: chip exchange, rather than 'grabbing chips'.
Many people think that plate washing is 'the house unilaterally grabbing retail investor chips', but in fact, plate washing in the cryptocurrency circle is a process of 'chip exchange' — the house first crashes the market to create panic, part of the retail investors’ loss chips are taken by the house, and another part is taken by 'determined retail investors buying the dip'; then, the house slightly raises the price, allowing the dip buyers to make a small 'profit' before dumping, and then buying back these chips.
During the entire process, the house's total cost remains basically unchanged, but the retail investors' cost rises from '1 dollar' to '0.9-1.1 dollars' — equivalent to 'using panic to exchange the retail investors' low-cost chips for high-cost chips'. This way, when the subsequent rise occurs:
With fewer low-cost retail investors, the selling pressure naturally lightens;
High-cost retail investors are more 'reluctant to sell' (afraid that once they sell, the price will rise), and will not easily crash the market;
New following retail investors see 'the coin price steadily rising' and are willing to buy at high prices.
This is the essence of plate washing: it's not about 'grabbing chips', but rather 'redistributing chip costs', creating space for subsequent offloading.
How to distinguish 'plate washing' and 'real offloading'? The two core judgment standards in the cryptocurrency circle.
The most headache-inducing problem for retail investors in the cryptocurrency circle is treating 'the house offloading and crashing the market' as 'washing the plate', buying more as the price falls; and treating 'plate washing oscillation' as 'offloading', cutting losses at the bottom. In fact, as long as you grasp two core signals, you can usually differentiate them:
1. The 'sustainability' of transaction volume turnover rates.
The essence of the house's offloading is 'unidirectional selling' — once they start offloading, they will only crash the market and not buy back, so when the coin price drops, the trading volume will become smaller and smaller (once it drops to a certain extent with no buyers, it can only decrease in volume); while plate washing is 'first crashing then buying', even if the coin price drops, the turnover rate will maintain at a high level (for example, the daily turnover rate remains above 15%-20%), because the house quietly buys the loss chips from retail investors at low prices.
For example: if the coin price drops from 1 dollar to 0.7 dollars, turnover rate drops from 20% to 5%, and continues to decrease over 3 days, it's highly likely that it is real offloading; if at 0.7 dollars, the turnover rate remains around 18%, with increased volume during the drop and reduced volume during the rebound, it’s basically plate washing. 2. The 'trend direction' of the moving average of the coin price. The house's operational cost is usually anchored to the '20-day moving average' (commonly used 'monthly cost line' in the cryptocurrency circle) — during plate washing, even if it breaks through the 20-day moving average, it will quickly pull back within 3-5 days, and the 20-day moving average will always maintain an upward trend (because the house will not let its cost line deteriorate); while during offloading, the coin price will continuously fall below the 20-day moving average, and the moving average will start to turn downward, and the house will no longer spend funds to pull back the moving average (because they no longer want to control the market).
Four common plate washing methods in the cryptocurrency circle, understand them to avoid being cut.
In the cryptocurrency circle, trading happens 24 hours a day, with extreme volatility and direct impacts from news. The house's plate washing methods are more flexible than those in the stock market, but the core logic remains unchanged. The most common methods are simply these four:
1. Intra-market sharp drop plate washing (exclusive to strong coins)
Often seen in newly launched small market cap strong coins: the house suddenly crashes the price within a 4-hour line, dropping it from 1.2 dollars to 1 dollar (a drop of over 15%), retail investors seeing a significant drop in a short time fear a 'waterfall kill' and sell off; then, the house quickly pulls it back to 1.15 dollars, completing the plate washing. The purpose of this kind of plate washing is 'quickly exchanging chips', allowing retail investors' holding cost to rise from 1 dollar to around 1.1 dollars, reducing selling pressure for subsequent rises.
2. 5-day line plate washing (commonly used for mainstream coins)
For mainstream tokens with slightly larger market caps (such as tokens with a market cap of 100-1 billion dollars), the house will not crash deeply but will oscillate around the '5-day line': when the coin price deviates too far from the 5-day line (such as rising more than 10%), they will crash the price back to the 5-day line; after retail investors cut losses near the 5-day line, they will raise the price again. The core of this kind of plate washing is 'not to destroy the upward trend', which can wash out short-term profit-taking, while not scaring away long-term holding retail investors.
3. 20-day line plate washing (standard for medium to long-term control)
This is the most commonly used 'medium-level plate washing' by the house in the cryptocurrency circle: no matter how the coin price oscillates, it will ultimately drop to around the 20-day line — because the 20-day line is the house's 'cost safety line'. If it drops too much, it will shrink their floating profit and may attract other speculators to buy the dip. After washing the plate, the house will increase buying near the 20-day line and then slowly raise the price, suitable for medium to long-term observation.
4. Triangular plate washing (the 'ultimate plate washing' before a bull market launches).
This level of plate washing is the highest and is often seen in the early stages of a bull market: the house first raises the coin price from 1 dollar to 1.5 dollars, then crashes it back to 1 dollar; then raises it to 1.6 dollars, and crashes it back to 1.1 dollars; after several repetitions, it forms a 'triangular oscillation zone' — this will force all retail investors who entered the 1-1.5 dollar range to sell. Once the exchange of chips is sufficient, the house will suddenly break through the upper edge of the triangle with increased volume, initiating the main upward wave. This kind of plate washing is the most thorough, and the subsequent upward space is also the largest, but retail investors often cannot hold on until the breakthrough and end up selling at a loss.
Lastly, a reminder: the core of plate washing in the cryptocurrency circle is 'anti-human'. Retail investors should not become 'emotional slaves'.
Many retail investors are washed out mainly because they replace objective judgment with subjective emotions: when bullish, they treat 'volume reduction with a price drop' as plate washing, buying more as it falls; when bearish, they treat 'increased volume with oscillation' as offloading, cutting losses at the starting point.
But the house's plate washing logic in the cryptocurrency circle is always 'anti-human': using price drops to create panic, using oscillation to exhaust patience, and using small increases to tempt you to hand over your chips. To avoid being washed out, remember these three points:
Do not focus on short-term fluctuations, but keep an eye on the 'cost line': if your holding cost is lower than the house's cost (for example, the house's average cost is 0.8 dollars and yours is 0.7 dollars), as long as the 20-day moving average has not turned, there is no need to panic;
Don’t believe in 'negative rumors', but observe 'capital movements': 80% of the plate washing negative news in the cryptocurrency circle is fabricated. As long as the turnover rate is high during the drop and the main force hasn't run away, it’s not real risk;
If you can avoid tokens controlled by the house, do so: small market cap tokens controlled by the house may seem to have large gains, but once the house offloads, it results in a 'waterfall collapse', and retail investors can't escape at all.
The core of making money in the cryptocurrency circle is not 'following the house', but 'understanding capital logic' — rather than guessing whether the house is washing the plate, it is better to choose tokens with large market caps, good liquidity, and solid fundamentals, avoiding those 'volatile and chaotic' tokens, which is the safest way to survive.
Trading cryptocurrencies is about repeatedly doing simple things, persistently using a method for a long time until you master it. Trading cryptocurrencies can be like any other industry: practice makes perfect, allowing you to make decisions swiftly and effectively.
This year marks my seventh year in trading cryptocurrencies. I entered the market with 10,000, and now it supports my family! I can say that I have used 80% of the methods and techniques in the market. If you want to treat cryptocurrency trading as a second career to support your family, sometimes listening and observing more can reveal insights outside your current understanding, helping you avoid five years of detours!
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