After years in the crypto world, the biggest fear is falling into the "wash trading" trap. Seemingly good news but no price increase, suddenly breaking support levels, trading volume surging... By the time you realize it, you're already among the locked-in group.

Today, let's start from practical experience and talk about the truth behind wash trading.

Don't misunderstand, wash trading isn't the market maker fighting for shares, but rather a series of carefully designed price fluctuations that turn retail investors' "low-cost courage" into "high-cost panic." Once retail investors cut their losses and flee, market makers can establish larger positions at lower costs, laying the foundation for subsequent big rises.

I once tracked a small coin. Total supply was 10 million tokens, priced at $1 at the time, with liquidity being scarce—typical "market maker paradise."

The market maker's operation process is as follows:

Phase one, opening 100 wallets, quietly accumulating 5 million tokens over two months, with an average price around $1. This silent accumulation method is usually undetectable by retail investors.

But there's a problem— the remaining 5 million tokens are held by other holders. If they try to push the price up directly, they can't sell much, and even if the price rises, no one will buy in, ultimately hurting themselves. So the next step is crucial.

Phase two, creating a false appearance of decline. The market maker sells off 500,000 tokens in batches, pushing the price down to $0.85, then quickly buying them back. On the daily chart, this shows three consecutive bearish candles— a signal retail investors fear the most. Once they see "news but no rise, instead a fall," their confidence wavers immediately.

At this point, public opinion follows suit. Twitter and groups start spreading rumors like "project wallet has unusual activity."