There are many theories that the crypto market is completely manipulative and its main jugglers are big players called Smart Money. They are also often accused of taking money from innocent hamsters. Let's look into this in more detail! Smart money is a certain group of investors and traders who have an advantage on the market by working with big capital.
🔴The role of "smart money" can be: • venture capital funds; • whales (traders with big capital); • institutional investors (banks, large corporations).
🔴With large amounts of working capital, they are able to influence the price of this or that asset. And, as we know, working with big capital is the key to sources of information inaccessible to most people. It can be working with exchanges, market makers, projects, etc.
🔴The example of Smart Money work: • Let's imagine that you are looking at a chart of an asset. You see a resistance level that price has hit several times, and in all cases there has been a pullback downward after touching the level.
• But then the price comes back to that level. What are most market players thinking at this point? "You could go short from this level and put a stop loss right behind it." But the big player understands this. And the best thing he can do to unload his bags that were accumulated earlier is to gather stops behind the resistance level. That is where the most concentrated liquidity zone is!
• That explains why price will break up the resistance level if most people are shorting an asset
