This Is How Crypto Whales Outsmart CYBER, PERP and Other Retail Traders: Expert Unveils Market Manipulation Tactics You Need to Know
Sumit Kapoor recently took to Twitter to issue a warning to all future traders, particularly those interested in cryptocurrencies. His thread focuses on the recent parabolic runs observed in the crypto market, specifically mentioning tokens like CYBER, PERP, TRB, and HIFI.
What you'll learn 👉
The Strategy of Whales
According to Kapoor, “whales,” or large holders of crypto assets, target coins with low liquidity and a low circulating supply. They buy up a significant portion of these coins, effectively reducing the circulating supply and making it easier to manipulate the price.
The Trap for Retailers
Retail traders often start shorting these tokens when they see a 30%–40% price pump. However, this plays right into the hands of the whales and the exchanges. The exchanges earn money through funding fees, and the whales profit by being on the opposite side of these trades.
The Dump
Once the whales have sufficiently pumped the price, they dump their holdings, which they had accumulated over a period of days or weeks. They may also short these coins simultaneously. Kapoor points out that this pattern is evident in the price charts of CYBER, PERP, and HIFI, the latter of which recently plummeted by over 47% in a single day.
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Show more +Wise Advice for Newbies
Sumit Kapoor advises newcomers to avoid shorting or longing these volatile tokens, as the likelihood of financial loss (“getting rekt”) is high. He also emphasizes the importance of using low leverage and setting a stop loss to protect one’s funds.
Key Takeaways
- Whales target low-liquidity, low-supply coins for easy manipulation.
- Retail traders often fall into the trap by shorting these pumped tokens.
- Exchanges and whales profit at the expense of retail traders.
- Extreme caution should be exercised when trading these volatile tokens.
Sumit Kapoor’s analysis serves as a valuable cautionary tale for anyone considering diving into the high-risk, high-reward world of crypto trading.
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