Retail investors always think that the market makers are watching their small holdings. Whenever the price drops, they immediately curse "dog market makers." But this is the biggest misunderstanding.

Market makers' shakeouts are not about抢夺 your coins, but about clearing floating chips and laying the groundwork for subsequent rises. In other words, a shakeout is a change of hands—pushing out retail investors who sell at the slightest wind and replacing them with long-term holders who can hold steady.

A real case makes this clear. A small-cap coin, initially priced at 1.3U, with a circulating supply of 12 million coins, held by retail investors for nearly 70%, while private placements hold 3.6 million coins but remain inactive. If the private placement suddenly pushes the price to 1.6U violently, retail investors will inevitably dump their holdings en masse. The private placement can't absorb so many sell orders, leading to a collapse. It's a lose-lose situation.

So, how do market makers usually operate? The strategy unfolds in three stages:

**Stage One: Gradual Bottoming.** The price drops 2%-3% daily, with extremely low trading volume. Without positive news to stimulate the market, retail investors' confidence gradually collapses, and they start cutting losses. Market makers seize the opportunity to buy 500,000 coins at the 0.95-1.0U level.

**Stage Two: Sharp Drop to Trigger Bottom-Fishing.** The coin price suddenly plunges to 0.75U, then quickly rebounds to 1.0U. This move lures bottom-fishers to jump in. Half a day later, the price breaks previous lows and drops straight to 0.68U, causing those who thought they were getting a bargain to suffer losses and sell off in panic.

**Stage Three: Using FUD to Amplify Panic.** Spreading false information about project risks and team movements, the price continues to fall to 0.52U. Retail accounts lose nearly 60%, giving up and liquidating their positions. Market makers then accumulate 6.2 million coins at the 0.5-0.55U range, completing the shakeout.

The essence of a shakeout is chip transfer. Low-cost retail investors are cleared out, replaced by patient institutions and big players. The selling pressure eases, allowing subsequent price rises to gain momentum.

Next time the price crashes, instead of cursing, reflect—this might be the prelude to the next rally.