Trading in the crypto market is not just about buying and selling coins, and in a way, it's a survival game. And if you think everything is honest and transparent, I hasten to disappoint you – large players constantly use various manipulations to take money from retail traders (that is, us).

Liquidity trap

Whales cannot just enter or exit a position easily because they have too large volumes. They need enough liquidity in the market. How do they create it?

Example: You see the price confidently breaking a resistance level, the candle is large, volumes are rising. It seems like a signal for continued growth... but a couple of minutes later, the price sharply drops, and you're left with a loss. What happened?

This whale lured the crowd into longs to sell them its liquidity. Once retail entered the market, the big player started to secure their position, dumping coins. The result – a drop and your stops are in the red.

How not to fall for it?

Watch the volumes. If the breakout occurs on small volumes – it's a warning sign.

Check if there were any large purchases at the lows beforehand (from where they could have taken liquidity for the dump).

Stop hunting (Stop Hunting)

Whales know where retail has placed stop-losses. They see liquidity at levels where the crowd places protective orders, and it's not hard for them to 'knock out' that liquidity to then move the price in the desired direction.

Example: You placed a stop-loss just beyond the nearest support level. It seems all logical, you're controlling the risk... But then the price seemingly reaches your stop, knocks it out, and immediately reverses back in your direction.

This is a classic stop hunt. Whales artificially move the price to clusters of stop-losses to activate them and obtain liquidity for their positions.

How not to fall for it?

Do not place stop-losses where everyone else does (obvious levels).

Use 'smart stops' – for example, just below the support level or taking ATR (average volatility) into account.

Watch for 'spikes' – if the price sharply pierced the level and returned, it may have been a stop hunt.

For reference*

Spikes are sharp shadows (tails) on candlesticks that form during strong price movements up or down, but then quickly return back.

How do they look?
Imagine the price sharply broke a level but immediately retraced, leaving a long tail on the candle. For example, the candle may go up by 2-3% in seconds and then close almost at the same place where it opened.

Why do they appear?

  • Stop hunting – whales move the price to clusters of stop-losses to gather liquidity.

  • False breakouts – an illusion is created that the price is moving in one direction, but in reality, it's a trap.

  • Liquidity shortage – if someone places a large order and there isn't much liquidity, the price will jerk sharply.

How to use them?
If you see a long spike, especially at important levels – be careful, it may have been manipulation. It's better to wait for confirmation before entering a trade.

False breakouts (Fakeouts)

One of the favorite tricks of large players is to make it seem like the price is about to go in one direction to lure the crowd, and then turn the market in the opposite direction.

Example: The price approaches strong resistance, breaks through it, everyone starts opening longs... but then a sharp reversal and the price goes down. Or vice versa – a breakdown of support, everyone sells in panic, and an hour later the market flies up.

This is a false breakout. The crowd believed that the trend would continue, but the whales simply collected liquidity and moved the price in their direction.

How not to fall for it?

Wait for confirmation of the breakout (closing of a candle beyond the level, retest with a pullback, and subsequent movement up/down).

Look at the volumes – if the breakout occurs on weak volumes, it's likely a fake.

Use indicators (e.g., OBV or Delta Volume) to understand who is dominant – buyers or sellers.

If you want to survive in this environment, learn #You_Crypto_Wave to see manipulations and not fall for obvious movements.

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