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Recently, the price of Ethereum (ETH) broke through the $4300 mark, attracting widespread attention from the market. However, behind this seemingly favourable information, there may be a carefully designed dumping strategy by market makers.
As an investor, it is crucial to understand these dumping tactics. The core objective of market makers is to transfer their holdings to retail investors without triggering a significant market decline. They typically combine technical analysis, news, and market sentiment to implement their strategies.
The following are several common dumping methods:
1. High Position Volatility Strategy: Maintain sideways volatility at a high position, creating the illusion of 'building momentum', while secretly and gradually selling off. During this process, trading volume may gradually shrink, but occasionally, long bullish candlesticks may appear to mislead investors.
2. Favourable Information boosts prices: Prices quickly rise with the help of favourable information such as major collaborations, successful financing, and new exchange listings, attracting chasing funds. Subsequently, during high market sentiment, gradual selling occurs. Although trading volume increases, the price struggles to break new highs.
3. Counter-trading technique: market makers engage in self-trading to create a false sense of activity, and after retail investors are convinced of an upward trend, they sell at high positions.
4. False Bottom Trap: Intentionally supporting the market during pullbacks to create the illusion of a solid bottom, attracting more buying. In reality, each rebound is an opportunity for the market maker to dump at a higher position.
5. Batch dumping and wash trading: first sell part of the holdings, then cause a rapid decline to scare off a group of investors, followed by a rise to continue selling, and repeat this cycle until the chips are basically cleared.
For Ethereum investors, it is especially important to remain clear-headed at the moment when the current price breaks through. Rationally analyzing market trends and being wary of possible dump traps are essential to stay undefeated in the rapidly changing cryptocurrency market.