In the cryptocurrency world, there is a senior who started with an initial capital of 100,000 yuan and now has assets worth tens of millions. One of his sayings is enlightening: 'The cryptocurrency market is like a crowd of rabble; as long as you can control your own emotions, it can become an ATM!' Take the period during the Lehman crisis, for example. The idea of 'cash is king' prevailed, and everyone smartly waited for a lower entry point. However, when it came time to decisively liquidate, they found it much harder than re-entering. During the market's lowest point, pessimism was rampant, and many hesitated, afraid to enter. It wasn't until the market started to rise, with moving averages in a bullish arrangement and a clear upward trend, that they mustered the courage to buy. Investors who initially wanted to 'buy low and sell high' ultimately became victims of 'chasing highs and cutting losses.'
'Whales' typically refer to big players who hold massive amounts of capital and have the ability to manipulate market prices. In the complex and volatile cryptocurrency market, the game between whales and retail investors is full of uncertainty. Whales can sway market prices in a short period, while retail investors, as the main force in the market, often face the dilemma of being 'harvested.' So, what kind of retail investors do whales prefer?
1. Blindly following trends retail investors
The type of retail investors that whales favor are those who lack independent thinking and blindly follow trends. These retail investors often jump at the chance to chase after a coin that is rising sharply, without conducting thorough market research, simply obeying the voices of the crowd. Whales often use various market signals or leverage the influence of social media to artificially create market fluctuations, thereby attracting these retail investors to enter the market.
For example, whales may first significantly raise the coin price to attract retail investors to buy in. Once a large number of retail investors flood in and the coin price is elevated, whales will decisively sell off their holdings to profit easily. In this case, retail investors chasing highs are likely to be 'harvested,' because whales have already completed their chip collection at lower prices.
2. Ignoring risk management retail investors
Many retail investors severely neglect risk management and capital management during trading, often betting all their funds on a single project or coin. They neither set stop-loss points nor have clear exit strategies when trading. Whales find such retail investors to be perfect prey, as it's akin to an unguarded opponent on the battlefield, allowing whales to slaughter them at will. Once the market trend goes against these retail investors' expectations, they can only watch their assets shrink dramatically without any coping strategies, while whales can easily realize profits from this.
If someone is confused by market fluctuations and doesn't know how to deal with a position they are stuck in, or feels misled during their operations, feel free to communicate!
