I. Foreword

In Part 1 of the series entitled “Shark Hunter” we learned the psychological secret behind the sharks’ pump-and-dump trick in the cryptocurrency market. Today, Part 2 of Bitcoin Magazine will reveal the sharks’ pump-and-dump cycle in the crypto market. Knowing this pump-and-dump cycle will allow you to know when to get into the market and when to stay out of the market for the best profits and avoiding maximum swings and losses.

II. The shark’s pump and dump cycle

As in the previous article, we learned that the cryptocurrency market is inherently prone to manipulation and is flooded with pump-and-dump tricks to kill uninformed investors. Of course, pump and dump also has a cycle, and usually the shark will break this cycle down into several steps as follows:

Step 1: collect goods.

In order to manipulate the price of a coin it is obvious that the shark must own a large amount of that coin. How did sharks collect coins? There are usually 3 ways for sharks to collect coins.

• First way: applies to sharks owned by mining organizations or early investment in the project. By 2 early mining methods or buying coins from the early rounds if the coin is not famous, the shark will control a large amount of cheap coins from that point on. However, this is a very risky and difficult method as there are not always potential projects to collect. Therefore, the sharks who use this method usually need to have financial potential as well as experience in the cryptocurrency market.
• Second way: so that sharks collect coins, that is, buy them in bulk at low prices through direct trading channels. You can buy from the miner’s community, from investors who want to leave the project, or even directly from the coin’s founding team. Since they buy both in bulk and directly, the pickup price here is very cheap compared to the market price. However, sharks are not always able to collect in this way because there are simply not always enough coins swimming outside to collect them. In order to successfully manipulate prices, sharks must have sufficient supplies to ensure that no one can “discharge” themselves onto their heads when they are pumping coins up. This leads us to the third method, which is also most commonly used by crypto sharks and which results in the price of the cryptocurrency market being constantly manipulated, which is direct pooling on the exchange.

In fact, this is a method widely used by sharks that gamers know too, but not everyone recognizes. A fundamental misconception made by crypto gamblers is that sharks congregate randomly in low price zones. In fact, sharks collect coins the highest buy / sell volume mainly in high price areas and resistance areas where there is a lot of liquidity.

Since sharks always play with a much larger amount of money than the volume of a product, they cannot buy coins at once, no one will sell them. If they buy directly into the sell wall, this alerts the other bots of the deaf traders and lets the price quickly increase, which they always want to buy at the cheapest price. .

Hence, sharks will buy in the area where most people are afraid and want to sell, to slowly see the market reaction. If you look at the bitcoin chart below, where do you think the sharks collected bitcoin?

This 3,000 zone has no volume, so no sellers. Why do sharks gather?

If you think they bought bitcoin in the $ 3,000 range, that’s a fundamental misunderstanding. This zone is an extremely low volume area and if they are overbought the price will recover immediately. Instead, the fish “chart” will create a resistance area at 4,000 and continuously push the price below that area for a long period of time. As a result, the 4,000 zone in the psychology of most traders becomes a strong area of ​​resistance, a major psychological milestone where the gambler’s psychology sells out of habit.

Then one fine day, when the number of people who wanted to sell was just enough, the 4,000 mark was immediately breached, accompanied by news that someone had spent $ 100 million buying Bitcoin, causing the price to skyrocket let. $ 100 million is the equivalent of 25,000 bitcoins, a relatively large number considering the number of bitcoins traded daily. I remember most of the players selling out because they thought this was just pump and dump news. According to behavioral habits, the $ 4,000-5,000 level has become a tough level of resistance in the players’ psychology. In reality, however, it is all just the beginning. At this point the shark goes to the second step: push the price.

Step 2: press and hold the price

This is the easiest step, but also the most expensive. For this price boost to be successful, the shark needs to attract the right number of knowledgeable dealers. And the quickest way to attract them is to draw a chart with a strong and sustained uptrend.

With this price surge, the sharks’ main method is to continually create a higher floor than the previous one. This is a typical sign of an uptrend, and speculators usually don’t point to money until an uptrend is established.

The structure continuously creates a higher floor than Bitcoin’s previous low as Bitcoin’s H4 is continuously held above the 200 MA.

Usually, pushing and holding the price is an extremely expensive task, but this step is less expensive if the shark collected a large amount of coins in the first step. As soon as they have maximum control over the supply, there will no longer be sufficiently strong selling power at high prices.

During this price surge, sharks often penetrate the major resistances and also those with the greatest liquidity. In the cryptocurrency market, the price push process will be very fast, strong and without adjustment to create a big FOMO for the community. How many times have you repeatedly sold, then had to buy back at a higher price and then swing high? You understand what I mean. However, this is not the most important of the steps sharks are taking to “power” cryptocurrency. The step that I think is the most important is the marketing step, one of the steps that normal traders rarely pay attention to, but play an important role in the whole process.

Step 3: Marketing

One of the questions that always confuses new traders is “Follow Price” or “Price Follow News”?

His answer is that price and news are one in the cryptocurrency market. Tin is running out to push the price up and down. End. Indeed, most of the news you read in the cryptocurrency market is a trap.

Let’s take a case study of one of the most successful campaigns in the cryptocurrency market, a name that was once famous in Synthetic Team to find out more. The name I’m referring to is CMT – Cybermiles.

Investors who saw 2018 already know a name that made headlines in the media, namely Cybermiles with the code CMT. In Synthetic Team, CMT is also known for allowing many investors to switch from holding coins to buying excavators.

From March to May 2018, CMT saw a huge acceleration from 800 Satoshi to more than 6,000 Satoshi, which is 7.5 times in 2 months (excluding compound interest due to the Bitcoin surge). At the same time, a lot of good news came out about CMT. E.g. This newsif the CTO, Huobi’s chief technical officer, thinks each line of CMT code is worth $ 3 million. Or news that Cybermiles worked with billionaire Mark Cuban to accept CMT when buying tickets to watch football. These messages are of course passed on calculated and are mainly used for marketing and the creation of Fomo for the Haie Pump / Dump CMT campaign.

When a coin enters the marketing phase, its pumping cycle is also over. During this time, shark marketing is primarily intended to attract uninformed investors to Fomo at high prices. This is also the start of wave 5 Elliot, FOMO’s “chicken-pig” wave when the price was pushed up but there was a divergence on the indicator and trading volume.

Divergence usually occurs at the end of a push cycle

The common feature of this era is that everyone is absurdly optimistic about the future of cryptocurrencies. (CMT is said to cost $ 2 for this period through the end of the year). This is also the time when many investors most often think about dying. But unfortunately, after the marketing shark is done, they will usually do the next step which is the dump and exit steps.

Step 4: drain and exit the row

There’s a saying in the cryptocurrency market that I really like: once it goes up it goes to heaven, and once it goes down it goes down.

If you look at the above image, you can see that once the shark’s pumping cycle is complete, the CMT will immediately discharge mercilessly. The discharge volume is gradual and very large, which shows that the sharks have dumped almost all the tokens they collected.

One thing players should remember is that sharks don’t have to buy below and sell above. In fact, they buy the most on the way up and sell the most on the way down.

EGT, another case of excessive pump and dump. Do you know where the duopen fish is?

And now, having created enough liquidity in steps 2 and 3, your job now is to simply sell to snobby players who want to buy in the hopes of winning 1-2 sporadic retracements. Normally, however, the retracement in the crypto market does not occur in such pump and dump phases. And if you see a coin that is constantly falling, with a lower high than the previous one, then the sharks are out. And if you happen to buy somewhere that isn’t at the bottom, congratulations on visiting the “Top Swing Club”.

III. epilogue

What you just read is a typical pump-and-dump cycle of the crypto market. In fact, this process is also known as a market maker. From a personal point of view, no matter how hard and …