How Market Makers Execute the Full Process of Shakeout and Harvesting "Part Two" Continuing from the previous article, shakeout in the crypto space refers to the manipulation of coin prices by major players or market makers through specific trading techniques to clean out floating chips and consolidate control. Shakeout primarily aims to make ordinary players sell their chips at relatively low prices. The method involves prolonged sideways consolidation, sharp drops, and other tactics to test the patience and confidence of holders, ultimately forcing them to hand over their low-priced chips to the major players, laying the groundwork for the main upward trend. 1️⃣ Core Objectives of Market Maker Shakeout ◽️ Replace chips outside the plan: Drive early holders out of the market to prevent excessive profits, mid-term sell-offs, and price crashes that could threaten or disrupt the major players' operational plans. This avoids excessive costs for price elevation or interference with smooth distribution. ◽️ Continuously replace holders at different stages: Raise the cost of holding for new entrants, further reducing the pressure on major players to elevate coin prices in the future. Repeated shakeouts increase the average holding cost, aiding major players in offloading coins at higher prices without scaring off retail investors prematurely, allowing for orderly distribution later. ◽️ High-frequency trading during shakeout: Major players can earn a portion of the spread to offset the higher transaction costs incurred during the price elevation phase. This increases their capital for future price elevation, boosts confidence, and obscures their cost structure, making it harder for the market to pinpoint their distribution points. ◽️ Adjust capital ratios: If major players acquire a large proportion of chips at the bottom, leaving insufficient capital for price elevation, they can sell at higher prices during the initial shakeout phase to restore their elevation power. ◽️ Wait for further maturity: By shaking out and consolidating, major players encourage early selling, reducing floating chips. When most chips are concentrated in their hands, elevating coin prices becomes relatively easier, setting the stage for the main upward trend (distribution). 2️⃣ Core Techniques of Market Maker Shakeout Shakeout without eliminating retail investors is almost impossible. As long as retail investors are monitoring the market, major players have ways to shake them out. If retail investors are not sufficiently cleaned out, it will impact the major players' operational plans, which is unacceptable to them. Major players employ various tactics to clean out retail investors, with three particularly effective ones that rarely leave retail investors unshaken: 🟨 "Grinding": Major players often use the "grinding" tactic to consolidate the bottom, extending the duration significantly while keeping coin prices stagnant. Prices rise by 1U and drop by 2U, forcing impatient retail investors out of the market. 🟨 "Pitfall": After "grinding," if many retail investors remain, major players create pitfalls to continue the shakeout. They engineer rapid, high-volume price drops, creating a sense of a breakdown with no visible bottom. This instills fear in retail investors, leaving them uncertain about how much further prices will drop. Many retail investors fall into these pitfalls and never recover. 🟨 "Coercion and Enticement": If the above two tactics fail to achieve the desired shakeout, major players resort to "coercion and enticement." This involves testing the market by elevating prices, giving retail investors a chance to break even or make small profits, prompting them to sell. For those who don't sell, major players control prices to naturally decline, forcing retail investors out. Below are some common shakeout methods and their characteristics: 🔻 1/ Suppressive Shakeout Suppressive shakeout occurs when major players complete accumulation and significant testing, leading to a market with substantial profit-taking. Major players exploit investors' desire to take profits by aggressively suppressing prices, causing sharp declines and amplifying market panic. This shakes investors' confidence, forcing them to relinquish their chips, achieving the goal of cleaning out floating chips. This method is characterized by speed and intensity, with rapid price suppression and significant declines. It is typically employed by powerful, skilled major players targeting speculative coins with fast capital inflows and short-term price surges. 🔻 2/ Sideways Shakeout Also known as platform shakeout, this method involves coin prices forming a prolonged consolidation pattern within a specific range. Major players exploit investors' impatience by using time to erode their will and patience, forcing them to relinquish their chips. During the sideways phase, retail investors' chips are fully exchanged within the trading platform, with trading volume gradually shrinking. This method is often used by weaker major players, relying on prolonged dull trends to erode retail investors' confidence, trading time for space. It is the most time-consuming shakeout method. 🔻 3/ Volatile Shakeout Volatile shakeout combines elevation, sideways consolidation, and suppression, making it the most commonly used method by major players. Its advantage lies in avoiding the loss of low-priced chips compared to suppressive shakeout and shortening the shakeout duration compared to sideways shakeout. Major players use repeated upward and downward volatility to shake out chips, confusing market participants about their true intentions and disrupting their trading rhythm, forcing them to exit and observe. This method is highly deceptive, with active trading volume and coin prices oscillating within a range. On daily candlestick charts, it often appears as triangular, rectangular, or flag-shaped consolidation patterns. 🔻 4/ Pinning and Contract Liquidation Shakeout As the crypto market enters a volatile shakeout phase, price fluctuations intensify. Major players use pinning and contract liquidation to clean out over-leveraged and weak-confidence chips, preparing for the next upward trend. This method creates larger price swings, allowing major players to distribute at higher prices or accumulate at lower prices for greater profits. During this process, market sentiment fluctuates sharply, weakening spot pricing power and increasing trading risks. 🔻 5/ Rapid Drop and Rise Shakeout Rapid drop and rise is another common shakeout method used by major players. This method targets weak-confidence chips and technical traders. Coin prices drop rapidly and then quickly rebound in a V-shaped reversal, confirming that the preceding drop was a shakeout. This method uses rapid price fluctuations to instill panic in investors, forcing them to relinquish their chips. To achieve the goal of forcing most retail investors out while avoiding detection, major players adapt their shakeout methods based on market holding conditions, changes in specific holders, and various objective factors. 3️⃣ How to Follow Market Maker Shakeout Rhythm for Entry 🟢 Narrow Range Shrinking Volume "Weaving Machine" Consolidation at the Bottom Characteristics: Coin prices consolidate narrowly at the bottom, with trading volume gradually shrinking, forming a "weaving machine" pattern. Major players accumulate chips during this phase, waiting for the right moment to initiate an upward trend. Action: Major players leverage positive news to create high-volume bullish candlesticks, initiating an upward trend. Investors should monitor trading volume changes to confirm whether this is a signal of major players accumulating and initiating. 🟢 Wide Range Shrinking Volume Consolidation at the Bottom Characteristics: Coin prices consolidate widely at the bottom, with limited upward movement and low trading volume. Major players use this method to clean out weak-confidence chips. Action: When coin prices break resistance levels, retail investors often enter. Major players may continue creating volatility to further clean out chips. Investors should monitor post-breakout trading volume changes to confirm whether the breakout is valid. 🟢 Gradual Upward Shakeout After Technical Stabilization Characteristics: Coin prices stabilize technically and begin gradual upward movement, with trading volume gradually increasing. Major players use this method to clean out weak-confidence chips. Action: Retail investors should enter early and hold. When high-volume bullish candlesticks appear, consider exiting. Investors should monitor trading volume changes to confirm whether this is a shakeout by major players. 🟢 Double Bottom Shakeout Without Volume Increase Characteristics: Coin prices form a double bottom pattern, with alternating slight declines between the left and right bottoms, and trading volume remains low. Major players use this method to lure technical traders out. Action: When coin prices break above previous highs with high volume, it is a good entry point. Investors should monitor trading volume changes to confirm whether this signals the end of the shakeout. 🟢 Rapid Drop and Rise Shakeout Characteristics: Coin prices drop rapidly and then rebound in a V-shaped reversal, targeting weak-confidence and technical traders. Action: When the V-shaped reversal is confirmed, investors can consider entering. Investors should monitor trading volume changes to confirm whether this is a shakeout by major players. 🟢 Gradual Decline Shakeout Characteristics: Coin prices decline gradually, with trading volume shrinking. Major players use this method to create market panic and clean out weak-confidence chips. Action: Investors should monitor volume changes. When trading volume shows significant changes, it may signal stabilization, and entry can be considered. 🟢 Horizontal Consolidation with Small Gains and Losses After Decline Characteristics: After a decline, coin prices enter a horizontal consolidation phase with small gains and losses, and trading volume slightly increases. Major players use this method to further clean out chips. Action: When small bullish and bearish candlesticks stabilize, consider building positions. Investors should monitor trading volume changes to confirm whether this is a shakeout by major players. 🟢 V-Shaped Reversal Shakeout Characteristics: Coin prices form a V-shaped reversal, similar to a double bottom but without a right shoulder pullback. Major players use this method to create a strong "head and shoulders bottom" pattern, preventing retail investors from entering. Action: Investors should monitor trading volume changes during the reversal to confirm whether this is a shakeout by major players. When the reversal is confirmed, consider entering. 🟢 Gradual Upward Movement with Shrinking Volume After Stabilization Characteristics: Coin prices stabilize and rise gradually with shrinking volume, maintaining low trading volume. Major players use this method to clean out weak-confidence chips, forming a stable pattern. Action: Investors should hold and wait for price increases, monitoring trading volume changes to confirm whether this is a shakeout by major players. When trading volume shows significant changes, it may signal that major players are preparing for accelerated upward movement. 🟢 Small Buying Frenzy Followed by Pullback Characteristics: After a small buying frenzy, major players may conduct a shakeout to cool the market and gather energy for subsequent upward movement. Action: The low-volume pullback after a small buying frenzy is an excellent entry point. Investors can enter after the pullback ends and confirm trading volume increases. 🟢 Volume Change Shakeout Characteristics: During the shakeout, trading volume typically shrinks. When coin prices start rising, trading volume increases significantly. If major players elevate prices with shrinking volume, it is likely still a shakeout; if one day's elevation suddenly shows high volume, it may be a true breakout. Action: Investors should closely monitor trading volume changes. When high-volume elevation occurs, consider entering. 🟢 Dead Angle Accumulation Mode Characteristics: Major players quietly accumulate chips during a downtrend, causing each subsequent price drop to be smaller or triggering a rapid drop to induce panic selling. As accumulation nears completion, retail investors exhaust their chips, forming a dead angle where the downtrend line intersects the lowest points. Action: For coins with this pattern, boldly enter and set a stop-loss slightly below the dead angle's lowest price. Waiting to Buy: After a rapid price drop, short-term investors can analyze using moving averages, trading volume, support, and resistance levels. If strong support and active buying emerge, consider entering. Already Bought at High Prices: Long-term investors can ignore short-term price fluctuations and continue holding during upward trends without rushing to buy. Combining Multiple Indicators: Players can use moving averages (MA), relative strength index (RSI), MACD, volume-price analysis, and other technical indicators to comprehensively assess market trends. Think from the perspective of major players and understand their operational intentions to follow their rhythm and profit together! Remember: Shakeout is preparation for the main upward trend. Don't fall before dawn. Let's encourage each other!