The Whale Trap: A Classic Market Manipulation
We've seen this pattern before, and it's happening again. A sudden, unexplained pump in price triggers FOMO, and retail investors jump in, unaware of the whales' game plan.
The Playbook:
1. Artificial Pump: Whales push the price up without fundamental reasons, creating a false sense of excitement.
2. Fake Breakout: Price surges above key resistance levels, luring in small traders who think it's a genuine breakout.
3. Liquidity Grab: Whales aim to create liquidity at higher levels, not to profit from the rise, but to unload their positions.
4. Distribution Phase: Large holders exit slowly, while price remains stable or slightly higher, giving a false sense of security.
5. The Crash: The price plummets, catching retail off guard, triggering stop losses, and liquidating positions.
Why It Works:
This trap exploits two powerful emotions: FOMO and greed. Many traders aren't aware of on-chain data or order book analysis, making them vulnerable to manipulation.
Stay Vigilant:
Be cautious of unexplained price movements, and don't let FOMO dictate your decisions. Stay informed, and prioritize risk management to avoid getting caught in the whale trap.
