Market Manipulation: The Effect of Whales and Big Players
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In the image, we can see a classic movement that appears to be market manipulation. This type of action is often orchestrated by large investors, known as whales, who have enough capital to influence the price of an asset, such as Bitcoin.
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Just as it goes up quickly, it can go down quickly.
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💡 What happened here?
Note the sudden jump in price and the massive buying volume, followed by a quick sell-off. This is known as Pump & Dump — a movement where large volumes are bought to drive the price up (Pump), followed by a massive sell-off (Dump), which causes a sharp drop.
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⚙️ Why does this happen?
1️⃣ Whale Manipulation: Big players move the market by buying large quantities, creating a feeling of FOMO (Fear of Missing Out) in small investors, who get in on the bull run.
2️⃣ Short Liquidation: If there are many open short positions, whales will push the price up to liquidate these positions, causing an even higher price.
3️⃣ Search for Liquidity: When the market has low volume, whales take advantage to move the price and find more buyers.
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📈 How to avoid being caught in the trap?
✔️ Always watch the volume! If the price rises quickly with very high volume, this could be manipulation.
✔️ Use indicators such as RSI and MACD to detect overbought and possible reversals.
✔️ Avoid trading based on FOMO. Wait for confirmations before entering a trade.
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⚠️ Remember:
Manipulations happen mainly in times of low liquidity. Big players know how to move the market, but those who study and pay attention to the patterns can identify these traps before it's too late!
