Having been in the cryptocurrency circle for ten years, I have seen too many retail investors curse the market makers as soon as there is a drop, thinking that the market makers are just targeting the little coins they hold. The truth is: the market makers wash the plate, not to snatch your chips, but to be able to pull it higher and sell it more steadily in the future.
Let me share an operation I have seen with my own eyes.
There is a small coin called METIS (anonymous small-cap coin, not a real duplicate name), the initial price is 1.2U, with a circulation of 10 million pieces, and retail investors hold 60%. A small team bought 4 million pieces at the bottom but did not dare to pull directly. Why?
Because if you force it up to 1.5U, early retail investors will sell pressure, and the team simply can't hold on, eventually no one will lift the sedan, and it will be self-playing. So it is necessary to wash the plate.
Their washing method is very systematic:
Phase 1: Silent decline with no volume
The coin price slowly declines from 1.2U to 0.9U, with no volume and no news. Retail investors start to panic: "Is it over?" "Run, don’t let it go to zero." So they begin to sell at a loss, and the market maker quietly accumulates around 0.9.
Phase 2: Sharp drop and rebound
The coin price suddenly accelerates downwards, dipping to 0.7U, then quickly pulling back to 0.95. Many people think it has bottomed out and rush in to buy. As a result, the market maker again dumps the price below the previous low, directly hitting 0.65. All the bottom buyers are buried, their mindset collapses and they sell at a loss.
Phase 3: Creating panic
Accompanied by FUD news: "The project team withdraws liquidity" "Large holders escape", the coin price crashes to 0.5U. The market is in an uproar, retail investors are despairing and liquidating, while the market maker is accumulating heavily in this range.
Finally, a V-shaped reversal + quick pullback
The market maker uses a small amount of funds to quickly pull the coin price back to 1U, creating a "golden pit". Those who previously sold at a loss dare not chase, while newcomers have their costs around 1U.
After this round of cleansing, the market maker's chips increased from 4 million to 6 million, with a lower average price. The key point is that the uncertain floating chips have been cleaned up, resulting in very light selling pressure for the subsequent pump.
The essence of washing the market is not to seize your coins, but to change participants—removing low-cost retail investors and replacing them with a batch of higher-cost, harder-to-sell participants.
So next time, when you see a crash, don’t just curse the market maker. If you understand, you’ll know: this is not the end, but the market maker's preparation for a pump.
