Is the cryptocurrency market manipulated? Learn these tips to protect yourself!
Have you noticed that sometimes when you buy cryptocurrency, the price drops, and when you sell, the price rises? This is not a coincidence; there may be whales, market makers, and insiders manipulating the market behind the scenes. But don't worry, we can learn to use this information to protect ourselves.
Tip 1: Follow the whales
Did you know? When those big players (whom we call 'whales') are quietly accumulating, retail investors often panic and sell. By the time the news breaks, they might sell off for profit while riding the hype. What should you do? You can track the wallets of the whales (this data is public). If the big players haven't made a move, don't rush to buy.
Tip 2: Beware of 'false breakouts'
Sometimes, the market appears to break through an important price level, and retail investors, fearing to miss out (FOMO), rush to buy, only for the price to suddenly drop. This is actually a trap; insiders may be ready to buy back at a lower price. Therefore, before entering the market, confirm the trading volume and liquidity levels to avoid being deceived by superficial breakouts.
Tip 3: Don't buy coins based on news
News is always lagging. When you see news saying a particular cryptocurrency is worth buying, you may have already missed the best opportunity. Conversely, when news says 'cryptocurrency is dead,' the whales may be quietly buying in. So, focus on on-chain activities rather than just news headlines. For example, when Ethereum dropped to $880 in 2022, the media shouted, 'Ethereum is finished,' but savvy investors were quietly buying.
Learn to think like a whale
To protect yourself in the cryptocurrency market, you need to learn to think like a whale and not be swayed by retail emotions. Buy with limit orders (during market panic) and sell (during market greed). Pay more attention to on-chain data and less to news and emotional commentary. Remember, the market may be manipulated, but as long as you understand the rules of the game, you won't easily become a victim.
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