Recently, I saw someone get wrecked by the "drawn door" pattern again, so I thought I should have a good talk about this phenomenon unique to the crypto world.

Speaking of the "drawn door" thing, it’s actually an extreme trend of rapid rise, sideways movement, and sharp decline within a short period. On the candlestick chart, it looks like someone drew a door with a pen, hence the name. But this isn’t a natural market fluctuation; it’s basically manipulated by the big players behind the scenes. No matter how advanced your technical analysis or how precise your indicator judgments are, they’re useless in this situation because it’s not driven by market fundamentals.

Why do the big players do this? Honestly, it’s to harvest retail investors’ money. They exploit these sharp rises and falls to deliberately trigger liquidations of leveraged traders, not sparing either longs or shorts, and then scoop up huge profits in a short time. This is what’s called targeted liquidation, and it sounds pretty brutal.

I’ve observed that this "door" pattern almost only appears in the crypto space; you rarely see it in stocks or forex markets. At most, the stock market might have a series of limit-down days followed by a V-shaped reversal, but the crypto market is different. These extreme moves happen repeatedly, which indeed reflects the unique characteristics of the crypto market.

Normal investment assets, after being pumped to a certain price level, usually enter a wait-and-see phase, where neither side dares to launch an attack easily because everyone fears being caught off guard. So at what’s called resistance levels, bulls and bears keep testing and pushing back repeatedly. But Bitcoin is different; the tug-of-war is very short-lived, the price seems relatively stable, and then suddenly plunges sharply, making people doubt if they’re seeing things.

A common reason behind this is that quantitative funds set automatic liquidation points at certain levels. These algorithmic funds have already made enough profit; as soon as the price hits the preset value, they automatically close their positions—completely emotionless. When the machines close out, no one dares to take the other side, triggering a cascade of liquidations. Other funds follow suit and start selling off, and that’s how the "door" pattern gets drawn on the right side. So next time you encounter this kind of "door" pattern, the best approach is to stay away and not be fooled by short-term volatility.