What does exit liquidity means and how to avoid such situations :
Exit liquidity mostly happens in memecoins or pump&dump schemes. Where some investors Due to hype helps in inflating the price of a particular coin and the early/insiders investors sell at the high price. leaving others stuck in low levels since the coin does not have any utility.
Insiders are the team of a certain coin or someone knows someone in the team who can leak essential information.
This #CYCLE is controlled by institutions not " Normal " Whales like before.
Once they decide to exit ( no matter when ), am sure not only Whales will get toasted, but we will see a lot of companies files for bankruptcy. Maybe even known ones.
I support the idea of cryptocurrencies, the decentralised ecosystem. However, it is sarcastic how big and huge institutions turned the decentralised BTC into " centralised" with them by buying it all, Lol.
The below facts are known for most of you but for some still :
1. It happens when #BTC shoots up, most of the Altcoins are idle or even dropping. why ?
Answer: Due to liquidity in the platforms goes to BTC mainly not the other coins
Market is divided into two categories only ." BTC" and "other coins" .
2. Then when BTC starts dropping the other coins should go up because the liquidity goes to them, right ?
Answer : No, Due to the huge Dominance of the Bitcoin. All other coins starts dropping
3. Which coins shall we buy ?
Answer: coins which have a real " completed "utility Not promises, not hype. Even if the project idea is brilliant, it will fail once the promises are not delivered.
4. Spot Trading or Futures ?
It depends on your trading style and also life style !
How many hours you can trade?, do you need the capital you are investing in anytime soon ? , can you control your emotions ? , are you ready to close a position on loss to rescue your account ?
ask yourself these questions you will know which type of trading suitable for you.
5. Trading can make us rich ?
Yes and No. Yes if you are lucky enough, if not then build up from scratch slowly and steady.
***************
Thank you all for reading, become mature in trading No mercy for reckless traders.