Differentiating "Clearing Inventory" and "Dumping Inventory": The Secret to Surviving in the Crypto Market

In the cryptocurrency market, many investors often confuse two phenomena that seem similar: (washout) and (selling). Both are indicated by a price drop, but their nature is entirely different. This difference is the boundary between “being tricked into selling” and “being stuck at the peak” — understanding this correctly can help avoid most market traps.

1. The Nature of Liquidation and Dumping “Dumping” is the action of the “big players” or large capital, intentionally pushing the price down temporarily to force small investors to sell off, thereby collecting at a lower price. This is a tactical “fake blow.” “Liquidation” is the real escape phase of large capital when buying power is no longer there, profit targets have been reached, or the upward trend has ended. After liquidation, the price often enters a prolonged decline cycle.
2. Three Important Criteria to Recognize (1) Trading volume – “core crypto” Sell-off: The price is falling but the trading volume is shrinking, indicating that the selling pressure is not strong, mainly due to the panic psychology of small investors. When the price recovers, the volume gradually increases again, showing that the capital flow is quietly returning. Dumping: Completely the opposite, the price is falling along with an explosive volume, reflecting strong selling force from large capital. When the price recovers, the volume contracts again, proving that the buying force is weak, and capital has withdrawn from the market. (2) Support level - “where the truth is revealed” Selling pressure: Usually does not break through important support zones, such as previous accumulation areas or the 60-day moving average. If there is a slight breakout, the price will quickly be pulled back. Liquidation: A loss of control, continuously breaking through support zones. When multiple layers of support are breached, it signals that funds have truly left, and a bearish trend is forming clearly. (3) The quality of the recovery bounce – “the final verdict” After the sell-off: The price recovers strongly and decisively, potentially forming a V-shaped pattern, quickly regaining the lost portion in a short time. After the liquidation: The price recovers weakly and sluggishly, and despite many sessions, it still cannot surpass the old peak, indicating that the buying power is no longer there.
3. Core Lesson The crypto market is not short of opportunities, but it lacks patience and the ability to preserve capital. Understanding the difference between “rũ hàng” and “xả hàng” helps investors avoid emotional actions, not buying in during times when funds are being withdrawn, and not panicking and selling off when the market is merely “testing the faith.” In investing, it is not about being fast to win, but about understanding correctly and being steadfast. Only those who grasp the rules of the movement of capital can go far and sustainably in this volatile world of cryptocurrency.