Alt Season and Market Maker's Strategy: How the Market Shapes Profits

Nowadays, as the cryptocurrency market develops with thousands of Altcoins, the saying “Alt season will start when no one believes in Altcoin anymore” has become quite familiar. But is this really true? Let’s analyze in detail the operation mechanism of market makers and their impact on the behavior of individual investors.

1. Alt Season - When Doubt Becomes Opportunity? Normally, “Alt season” is understood as the time when Altcoins explode in value, attracting the attention of investors. However, according to some experts, alt season may begin when the majority of investors have lost faith in Altcoins. This seems paradoxical, but let’s consider it carefully: Widespread skepticism: When public opinion and investors begin to doubt the sustainability of Altcoins, the audience becomes cautious, and prices may decline. Market maker’s price pumping time: This is when market makers - with large resources and deep market behavior knowledge - carry out ‘price pumping’. They capture the crowd psychology and use their strategies to profit.
2. Mechanism of Market Maker Operation Market makers always operate in a systematic cycle, taking advantage of the psychology and actions of retail investors. The typical operating mechanism can be summarized as follows: Buy at a Low Price: Market makers will accumulate a large amount of coins when the price is low. At this time, most investors are still skeptical and not ready to invest. Stimulating Price Increase: After having a stable reserve, they started buying in large quantities, creating buying pressure to push up the price. Indicators: The price of the coin increases slightly but enough to stimulate the ‘missed opportunity’ feeling of investors. Attracting Small Investors. When the coin price starts to rise, those who have not participated (small retail investors) will see this as a “golden” opportunity to join in, they start buying with the expectation that the price will continue to rise. Sell High Profit: At the peak of the excitement, the market maker will sell the coins purchased at a high price. At this point, retail investors may have bought at a higher price, and when the market adjusts, they suffer losses. The Price Decline and Repetitive Cycle: After being sold, the coin price starts to decrease gradually due to selling pressure from retail investors. When the price hits bottom, market makers continue to buy, ready for the next cycle. In conclusion: Market maker buys → Price increases → Retail investors buy in → Market maker sells for profit → Price decreases → Retail investors forced to sell at a loss → Market reaches low price → Market maker buys back … and this process repeats.
3. Why Are Individual Investors Always the Losers? FOMO (Fear Of Missing Out): Psychological When they see the price increase, many individual investors feel afraid of missing out on the opportunity, unable to control their emotions leading to decisions to buy with the crowd. Lack of information and strategy: Small investors often lack the tools and in-depth data to recognize the actions of market makers, leading to decisions based on emotions rather than objective market analysis. The market is easily manipulated: ( With significant resources, market makers have the ability to influence prices and create significant market volatility with just a few purposeful actions.
4. How to Protect Investment Capital? Although the market is always volatile, there are some measures to help individual investors minimize risks: Thorough research: Before investing, gather information from multiple reliable sources, carefully analyze market trends and price behavior. Control emotions: Avoid getting caught up in FOMO. Don’t make investment decisions solely based on price increase. Always define your profit goals and risk tolerance. Diversify your investment portfolio: Don’t put all your eggs in one basket. A diversified investment portfolio will help minimize the risk from sudden fluctuations. Use risk management strategies: Set stop loss levels )stop loss( and take profit levels )take profit( to protect investment capital when the market goes in an unexpected direction.
5. Conclusion Understanding the ‘pump and dump’ mechanism of market makers is an important step in identifying signs of the alt season. When the majority of investors lose faith in Altcoins, that is when market makers can start manipulating prices to create profits for themselves. Understanding these strategies clearly will help you, individual investors, gain a more objective view of the market and make wise investment decisions. Message: Always stay alert and thoroughly research before stepping into any transaction. Do not let emotions dominate, as the cryptocurrency market is always volatile and risky. Monitor and learn: Don’t forget to follow reliable sources and in-depth analyses to timely grasp new market trends. Preparation and knowledge will be the key to help you overcome the ‘traps’ set by market makers. Wish you make smart and safe investment decisions on the journey to explore the cryptocurrency market.