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Many small-cap cryptocurrencies actually have discernible patterns. Generally speaking, these coins tend to surge to a peak first, then experience a steady decline, hitting the lowest point before truly beginning.
At this stage, the main players start to emerge. They will spend 3 to 5 days or even longer gradually accumulating positions. During this time, the candlestick charts look very steady; although the trading volume isn't large, the price gradually steps up each day — this is a sign of accumulation. Once enough chips are gathered, they enter a violent upward push. Retail investors see the sharp rise and can't help but follow the trend, often benefiting from this move.
But the market isn't that simple. After the rally, sideways consolidation is followed by another downward move, with a clear purpose: to lure in short sellers. Those who are not firm in their bullish stance will either cut losses and exit or be forced to take profits. Then, with increased volume at a relatively low point, another push upward occurs, trapping those who chased the short. The price returns slightly below the previous surge zone, trapping the initial bullish followers as well, and profit-taking follows.
Next comes sideways consolidation again, followed by another downward move. This time, it may be accompanied by increased volume, but the decline won't be too deep — at this point, the shorts can actually exit because it's a false breakdown. In reality, the main players are paving the way for the next big surge, and this step is designed to lure in short sellers.
After completing all this, they continue to push higher. This not only traps those who chase the fall but also causes most retail bulls to cut losses or take profits early. At this point, all the short positions chasing the decline are locked in, and high-level consolidation begins. The entire cycle of phases 4, 5, and 6 repeats, sometimes lasting an entire day. Within this cycle, once the price breaks through the previous high on the daily chart, the cost to push higher increases, and the market adjusts accordingly... This is the psychological battle among small-cap players.