Whales are the major power players when it comes to trading in the crypto realm. One thing must be noted that they are not always individuals and can be individual, a group or a collective. The most important technique which they employ to create huge profit is known as Rinse and Repeat cycle. Sounds so generic? But it’s brilliant if executed timely.
The rinse trade is not new to the crypto market and is utilized in many markets including stocks and shares. Timing is everything in this technique. Its profitability is manifolds compared to other techniques.
Rinse and Repeat cycle begins with rinsing which involves traders with a lot of holdings of any particular asset which in this case is Bitcoin. The trader starts to sell Bitcoin at a price which is lower than the market price in order to generate artificial panic in the market. This works all the time. Seeing the prices falling, the small traders begin to sell their Bitcoins and thus triggers a huge sell-off which results in the free fall of the price.
Here the trick was to trigger the sell-off without incurring much loss on trader’s own assets. In order to keep the losses to a minimum, the trader sells it just below the market price. It is small for him but is enough to trigger the rush to sell.
Now the Whale watches the prices falling and wait until it reaches a new low. At this point, when the prices are so low, he enters the market again but this time as a buyer. He now buys the same Bitcoin at a much lower price in huge numbers and thus increases its holding in his basket.
After the rinsing, they repeat this process in almost a cyclic fashion to hoard more and more Bitcoin at a very low price and then sell it when it reaches its heights. This also gives them enough power to trigger the sell-off again and again. The strategy is maddening simple but yields a powerful return if the timing is managed perfectly.