The most frightening thing about trading coins isn't the decline itself, but that you can't understand why it's falling.

Some time ago, an investor asked me, saying his coin had dropped nearly 30 points, and he was very confused—was this really a shakeout by the big players or actual distribution? I took a quick look at the K-line and understood immediately: he mistook the distribution signal for a shakeout, and as a result, he got trapped deeply.

Having been in this circle for seven or eight years, I've seen too many retail investors fall into the same traps. In summary, there are two deadly ways: one is mistaking distribution for a shakeout, wanting to buy the dip more and more as it falls, ultimately getting caught even deeper; the other is mistaking a shakeout for distribution, rushing to cut losses at the slightest rebound, watching the market take off right in front of their eyes. How can we distinguish between these two situations? Let me explain with actual market movements.

Here's a real story. There was a coin (let's call it M coin for now), which rose from $2 all the way to $5, then started to plunge. At that time, many people misjudged the situation and suffered heavy losses.

**First signal: Volume increases but price gets stuck.** The coin's price began to consolidate around $5, with trading volume nearly tripling compared to before, but the price couldn't break through this level. Don't be fooled by the high volume; in reality, the big players are quietly offloading their holdings there, while using small buy orders to create a false sense of support.

**Second signal: Sharp downward plunge.** One day, the big players suddenly withdrew their support orders, and the price dropped from $5 straight down to $3, with hardly any pause in between. This kind of sharp drop is very fierce; many retail investors think it's a golden opportunity and rush in to buy the dip, only to get trapped.

**Third signal: Fake rebound to lure more buyers.** The price rebounds from $3 back to $4, seemingly a V-shaped reversal, but if you watch the volume carefully, you'll notice that the volume of this rebound is actually shrinking continuously. This is the big players' final trick to lure more buyers.