Why do sharp declines often occur during a bull market? This is mainly due to violent market manipulation.
In a bull market, retail investors tend to have high loyalty and strong stickiness. If they do not experience sharp declines, it is difficult to wash them out of the market; sometimes, continuous sharp declines are needed to make most retail investors sell and exit.
Some may ask, why is it necessary to wash out retail investors?
Isn't it good for everyone to profit together in the cryptocurrency market?
In fact, if there is no new capital inflow in the cryptocurrency market, if retail investors are not washed out, the main players will need to spend a lot of funds to raise the coin price.
Because during the rally, once retail investors make a profit, they choose to cash out, which significantly increases the resistance faced by the main players, as if the main players are 'lifting the sedan chair' for the retail investors.
If retail investors are washed out through sharp declines and they cut their losses and leave the market, the main players can not only achieve profits but also facilitate further price increases in the later stages.
In summary, the reason for the frequent sharp declines during a bull market lies in the strong stickiness of retail investors.
Therefore, if the operating strategy is not appropriate during a bull market, the losses faced by retail investors may be even more severe.#币安LaunchpoolVANA #VELODROME将上线币安 #BTC重回关键位置后走势