Don't misunderstand anymore—The dealer's washout isn't targeting your little chips.
Having been in the crypto circle for many years, I have seen retail investors curse the dealers as soon as they drop, always feeling that the coins in their hands are the dealer's targets.
But in reality, the dealer's intentions behind the washout are far deeper than you think.
For example, the small coin GAMA, initially 1U, with a circulation of 7 million pieces, over 60% held by retail investors.
The team acquired 2.8 million pieces at the bottom but did not dare to pull it up directly—once it reaches 1.3U, early retail investors will be unable to handle the selling pressure, ultimately trapping themselves, so the washout became the only choice.
Step 1: Slow decline without volume
GAMA slowly dropped from 1U to 0.75U, with low trading volume and no news. Retail investors panicked, thinking, "It's going to zero," and hurriedly cut their losses, while the dealer quietly accumulated chips.
Step 2: Sudden drop to trap people
The coin price suddenly spiked down to 0.55U and then quickly pulled back to 0.85U. Bottom fishers thought they saw the bottom and entered the market, but the dealer then smashed the price down to 0.5U, trapping all the bottom fishers, who were forced to cut their losses out of panic.
Step 3: Creating panic
In conjunction with the FUD news of "project party withdrawing funds," GAMA dropped to 0.4U. Retail investors completely despaired and cleared their positions, giving the dealer the chance to absorb the chips.
Finally: V-shaped reversal
A small amount of funds brought the price back to 0.9U. Old retail investors dared not chase, and new retail investors had their costs around 0.9U.
After the washout, the dealer's chips increased to 4.5 million pieces, with an even lower average price. The key is that the floating chips were completely cleaned out, resulting in low selling pressure for future rallies.
The essence of the washout is "blood transfusion": removing low-cost, easily panicked retail investors and replacing them with funds that are not easily willing to sell.
Next time you encounter a sharp drop, don’t curse blindly; understand this logic, and you will know this is preparation before a rally.
