Compared with a few months ago, retail traders have changed their approach. They used to lean mostly toward shorting, but now they’re more willing to go long, buy spot directly, and even buy into coins early.
A big reason for this shift is that recently, meme coins have been offering such strong profit-making opportunities. Coins like $AKE and $LAB have posted one explosive rally after another, creating plenty of get-rich-quick stories in a short time. The market has returned to a phase where meme coins are flying everywhere. After seeing so many of them, retail traders have become much more risk-tolerant. Instead of sitting on the sidelines or shorting, they’re actively building positions.
But there’s a reality to consider: after several rounds of being taken for a ride by meme coins, retail traders have significantly less money in their hands. When the main target’s ammunition—retail traders’ capital—starts to run low, the focus of the hunt naturally shifts to someone else: whales, especially the so-called smart money that relies on data and believes it has an information advantage.
For market makers, taking money from smart money can be even easier than taking it from retail traders; the tactics are just different. Retail traders mostly follow their emotions and are often a beat behind on the news. Smart money, on the other hand, places trades based on data signals and trading strategies it has built itself.
Here’s the key point: a lot of on-chain data and market signals can be manufactured. Market makers are like fishermen setting a trap: first, they make a certain data pattern work repeatedly, so smart money decides the indicator is reliable and gradually dares to increase its position. Once positions are sufficiently concentrated, they break the pattern outright. In one move, they can claw back all the profits previously made using that strategy.
Put simply, the data advantage that many smart-money traders pride themselves on may have been a setup laid by market makers from the start. The data looks useful at first to lure you into taking a large position; when the time is right, the signal stops working, and the harvest begins. This approach is far more efficient than picking off retail traders one by one.
A big reason for this shift is that recently, meme coins have been offering such strong profit-making opportunities. Coins like $AKE and $LAB have posted one explosive rally after another, creating plenty of get-rich-quick stories in a short time. The market has returned to a phase where meme coins are flying everywhere. After seeing so many of them, retail traders have become much more risk-tolerant. Instead of sitting on the sidelines or shorting, they’re actively building positions.
But there’s a reality to consider: after several rounds of being taken for a ride by meme coins, retail traders have significantly less money in their hands. When the main target’s ammunition—retail traders’ capital—starts to run low, the focus of the hunt naturally shifts to someone else: whales, especially the so-called smart money that relies on data and believes it has an information advantage.
For market makers, taking money from smart money can be even easier than taking it from retail traders; the tactics are just different. Retail traders mostly follow their emotions and are often a beat behind on the news. Smart money, on the other hand, places trades based on data signals and trading strategies it has built itself.
Here’s the key point: a lot of on-chain data and market signals can be manufactured. Market makers are like fishermen setting a trap: first, they make a certain data pattern work repeatedly, so smart money decides the indicator is reliable and gradually dares to increase its position. Once positions are sufficiently concentrated, they break the pattern outright. In one move, they can claw back all the profits previously made using that strategy.
Put simply, the data advantage that many smart-money traders pride themselves on may have been a setup laid by market makers from the start. The data looks useful at first to lure you into taking a large position; when the time is right, the signal stops working, and the harvest begins. This approach is far more efficient than picking off retail traders one by one.