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Author: Admin | 2025-04-28
Off the trader’s assets to cover losses. Profits for Exchanges: • On average, $500 million is liquidated daily in Bitcoin trading, with exchanges taking fees and reclaiming collateral from liquidated positions. • Exchanges can intentionally trigger liquidations by manipulating prices or creating volatility, profiting directly from traders’ losses. 6. How the Dominant Group Profits The small group controlling Bitcoin profits in several ways: 1. Price Manipulation: Large holders can inflate prices by buying in bulk (pumps) and then sell off at the peak (dumps), causing a crash and profiting at both ends. 2. Liquidation Exploitation: Coordinating with exchanges, whales can trigger stop-loss orders or liquidations, creating artificial volatility. 3. Retail Exploitation: Retail traders often act based on emotions or misinformation, making them easy targets for manipulation. For example, if a whale knows that a significant number of leveraged positions will be liquidated at a specific price point, they can sell Bitcoin to push the price down, triggering liquidations and then buying back Bitcoin at a lower price. 7. Retail Traders as the “Cash Cows” of the Bitcoin Market Retail traders make up the majority of Bitcoin trading volume, but they are also the most vulnerable participants in the market. Their behavior—often driven by emotion and limited knowledge—makes them easy prey for whales and exchanges. Common Patterns: • Fear of Missing Out (FOMO): Retail traders often buy during price surges, only to sell at a loss during corrections. • Panic Selling: When prices drop, retail traders panic and sell, further amplifying the decline. • Leverage Misuse: Many retail traders overuse leverage, increasing their risk of liquidation. In this system, retail traders serve as the primary source of liquidity and profits for the dominant group. 8. How Coordination Among the Few Drives Market Cycles Bitcoin’s market cycles—bull runs and bear markets—are often orchestrated by the small group controlling the majority of Bitcoin. Through coordinated actions, they can: 1. Create Artificial Bull Markets: By accumulating Bitcoin and driving prices higher, they attract retail interest, leading to increased demand and further price appreciation. 2. Trigger Bear Markets: Once prices reach a peak, they sell off, causing a crash and liquidating over-leveraged positions. 3. Repeat the Cycle: The process repeats, with retail traders losing money in each cycle while whales profit. 9. Why This Matters: Risks of Bitcoin Centralization Bitcoin’s centralization poses several risks: • Market Instability: Concentrated control leads to extreme price swings, deterring
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