This is a candlestick chart of tut from August 19 to August 25, along with its trading volume (1-hour chart).
First stage: hoarding inventory
From this, it’s clearly видно that from the 19th to the 21st, market sentiment is relatively low, and its price is also relatively low. At this time, it’s an ideal moment for the dealer to enter the market and hoard a large amount.
At this time, in Binance’s on-exchange position concentration data (not allowed to take screenshots), tut’s position concentration has been steadily rising starting from this stage. To prevent retail investors from realizing the main force is buying, the dealer will use multiple accounts to make purchases. However, because the purchase volume is too large, the position concentration still ends up increasing.
Phase 2: Washout
Starting from the afternoon of August 21st, the custodian began continuously pumping the price. By transferring from left hand to right hand (selling at a higher price and buying at a higher price), Tut’s price started to rise in a short time, while trading volume increased dramatically.
At this moment, the market’s confidence in Tut has been slightly boosted.
So starting on August 22nd, the merchants began doing small amounts of distribution to suppress the upward momentum, wash out the retail traders who still held the coin, and reduce the pressure for the following pump.
Phase 3: Pump
At this time, a large number of selling retail traders have already been washed out, and the market’s confidence in Tut keeps growing. The merchants continue to pump by transferring from left hand to right hand (and from the candlestick chart you can also see that some retail traders couldn’t hold on and started selling, but it completely can’t stop the custodian’s pumping 😂😂😂).
Phase 4: Distribution
From the afternoon of the 21st, after the pump started, all the way until the early hours of the 23rd, Tut had already doubled. The custodian also felt the profit was enough and prepared to distribute the coins.
It’s still this chart. You can see that from the early hours of the 23rd through the morning of the 24th, Tut’s price kept oscillating. That’s because the merchants started distributing the coins in batches, and because the market had a lot of confidence in Tut, many retail traders began buying. This created a scenario where the custodian distributes, retail traders buy, the custodian distributes again, and retail traders buy again. Over the course of that one day, the custodian managed to get most of the inventory out, dumping the majority of the coins onto retail traders—while still holding back some to use for dumping.
Phase 5: Dumping
At this point, the merchants have already sold off almost all their inventory. They’ve profited handsomely and have gotten their fill. A large amount of Tut is now in retail traders’ hands. If the merchants want to make even more profit, they do so by dumping the price to short.
After the custodian’s distribution basically stopped in the morning of August 24th, retail traders continued buying, pushing the coin’s market price higher and higher until the afternoon of August 24th. Then the merchants began throwing out all the coins they held, which also triggered retail traders’ panic, and caused them to sell Tut as well. As a result, Tut dropped sharply in a very short period of time. The merchants then made a big profit by shorting.
Summary
If I were to explain it in more detail, I could combine more technical indicators. But this candlestick chart is already quite standard, so I’ll explain it using only the candlesticks.
In short, the merchants make money by pumping for their long positions, and they also make money by dumping for their short positions.
As the saying goes, investing in the crypto market involves risks—be cautious 😂😂😂 You can judge the custodian’s direction through certain technical indicators, but it’s still quite difficult. Xiaoqiu here would recommend investing in coins with relatively large market caps that are harder for the custodian to manipulate.
If you think Xiaoqiu explained it well, give a follow 😘😘😘