For newcomers just entering the cryptocurrency space, understanding common market tricks and traps is key to avoiding becoming 'chives'. Below are 14 core tricks organized, along with countermeasures, to help newcomers establish risk awareness:
1. Time and liquidity traps: harvesting through time zone differences
The time patterns of the Asian session and the European and American sessions
The main force often uses time zone liquidity differences to manipulate the market: during the Asian session (8-10 AM), retail investors may be targeted when they have just woken up or have not fully entered the market; during the European and American sessions (3-5 AM), retail investors in the Asian session are easy to harvest after they fall asleep.
Response: Avoid chasing highs during opponent's rest periods (such as late night in your own time zone), pay attention to liquidity changes, and reduce operations during extreme periods.
II. Technical Traps: False Support/False Breakout
"Ink marks" at key support levels = bull trap
True strong support levels are usually characterized by a rapid "pin drop" (a sharp drop followed by a quick recovery). If the price oscillates and hesitates repeatedly at the support level, it may be that the major players are deliberately delaying the market to attract retail investors to buy at the bottom before dumping the shares.
Response: Observe the volume and candlestick pattern at support levels. Be wary of rallies after periods of stagnation; do not blindly chase the market.
Signal difference between upper and lower pins
A downward spike (a sharp drop followed by a rebound) is often a sign of market manipulation and may present a buying opportunity; an upward spike (a sharp rise followed by a fall) is often a sign of a bull trap and may present a selling signal.
Response: After a sharp drop, combine trading volume and trend analysis. If the price stabilizes after a downward drop, you can try a small long position. If the price stagnates after an upward drop, consider taking profits.
The "Misalignment" Between Positive News and Market Trends
Known positive factors (such as project promotion and media hype) are often already reflected in prices, making it easy to cause a price crash when the project is implemented; real positive factors may be quietly driven up by major players in advance.
Response: Avoid chasing "obvious positive news" and focus on potential positive news that has not been fully digested (such as technological breakthroughs and ecosystem progress), but verify its authenticity.
Technical levels become ineffective in extreme market conditions.
In extreme market conditions such as the peak of a bull market or the bottom of a bear market, market sentiment dominates, and the original support/resistance levels may be deliberately broken by major players, forming a "false breakout".
Response: Reduce leverage in extreme market conditions, avoid relying on fixed technical levels, and pay attention to overall market sentiment and capital flows.
III. Market Sentiment and the Consensus Trap: Following the Crowd Leads to Being Harvested
Excessive promotion in social media = a sign of a market top
When a coin is widely forwarded and touted in social media groups and chats, it is often a signal that major players have driven the price up to a high level and are preparing to sell off their holdings. Be especially wary of "Chinese people's schemes" (which have strong Ponzi scheme characteristics).
Solution: Independently verify the project's fundamentals (team, code, and implementation), and do not enter the market due to herd mentality.
A coin that someone is "pushing hard" will inevitably be dumped.
There may be profit motives behind the promotion of cryptocurrencies (such as market manipulators paying to pump and dump), with the aim of attracting retail investors to take over, and then dumping the shares and leaving the market after the promotion is complete.
Response: Be wary of "order recommendations" and "order guidance," and do not blindly follow them, especially projects promising high returns.
Heavy investment in altcoins = targeted liquidation
Altcoins have poor liquidity, and major players can precisely target those with heavy positions: when you have an excessively large position in a certain coin, the major players may suppress the price and trigger a liquidation.
Solution: Diversify investments, keep altcoin holdings no more than 10% of total capital, avoid leverage, and reduce the risk of being targeted.
IV. Major Players' Operating Techniques: Psychological Warfare and Reverse Harvesting
Stop-loss level = point where major players "drive people away"
When your long/short positions are stopped out, major players often reverse their positions to push the price up or down, aiming to clear out speculative followers before initiating a new trend.
Solution: Set a reasonable stop loss (avoiding over-tightening), or use a "trailing stop loss" to follow the trend and reduce the probability of being shaken out.
A slow and steady rise indicates a bull market; a sharp rise should raise red flags.
A slow rise reflects the accumulation of real buying pressure and is a sign of a healthy bull market; a sharp rise (such as a continuous surge) is mostly driven by sentiment and aims to attract retail investors to chase the high prices and take over the shares.
Strategy: Hold on for slow rises, take profits in batches when prices surge, and avoid entering the market when emotions are running high.
A good short-selling position = the main players "torturing" you.
When the market is generally bearish on a certain level, major players may repeatedly cause fluctuations or price spikes, forcing short sellers to repeatedly stop their losses and increase their holding costs.
Response: Before shorting, assess the intentions of major players, set strict stop-loss orders, and avoid excessive leverage.
The location you dare not buy in is an opportunity; the location you think you can profit from is a trap.
Retail investors often miss out on low-price opportunities due to fear, but fall into the trap of chasing high prices due to greed. Major players exploit this psychology, creating "fear of missing out" and "get-rich-quick fantasies."
Solution: Develop a trading plan and execute it according to the strategy to avoid impulsive decisions to chase highs and sell lows.
V. Cycles and Consensus: Peak Sentiment Signals Risk
The consensus that "a bull market is coming" is a signal to reduce holdings.
When the entire internet is discussing a "bull market" and a large number of newcomers are entering the market, it is often the peak area where market sentiment is overheated, and major players begin to sell off their holdings.
Response: When emotions are running high, take the opposite approach and gradually reduce positions to lock in profits.
A precursor to a bear market = a surge in counterfeit goods.
Before a bear market arrives, altcoins often experience a sharp rise due to a final surge in speculative activity ("the last hurrah"), followed by a withdrawal of funds and a price crash.
Response: Pay attention to market cycles, take profits promptly after altcoins surge, and avoid being the last one holding the bag.
Summary: Survival Rules for Beginners
Respect the market: The cryptocurrency market is highly volatile and has no absolute rules. Any technical analysis must be combined with market sentiment.
Independent judgment: Don't follow the crowd of online communities or influential figures; verify information with data and logic.
Controlling risk: Use light positions, diversify your portfolio, and use less leverage to avoid being "targeted and eliminated" by major players.
Emotional management: Stay calm when greedy, be rational when fearful, and don't be swayed by short-term fluctuations.
Remember: In the cryptocurrency world, you earn money based on your knowledge. Risks you don't understand will eventually turn into losses.