Author: danny
Many people study on-chain data to find out "whether this coin has a market manipulator," and then try to avoid, embrace, or follow it. But the truth is—coins without market manipulators simply won't rise. So the truly useful question isn't "whether there's a market manipulator," but rather "what stage is the market manipulator in—accumulating, pumping, distributing, or have they already run away?"
To sum it up: you will definitely find the dealer, because dealers are everywhere.
This article provides you with a signal framework that combines on-chain and off-chain signals. It's not about turning you into a detective to catch market manipulators, but rather about helping you quickly determine whether the current market is in a phase favorable to retail investors.
I. On-chain signals: What are the chips and funds saying?
Remember: This version doesn't lack funding or data; what it lacks is funding from those willing to invest. Like all games, everything revolves around getting you to "pay to play." As long as you keep paying attention, there are countless memes to choose from, and you're bound to find one that suits you.
1. **Chip Concentration:** Calculate by combining related wallets. Concentration itself isn't important; the degree of concentration is crucial. Don't just look at the "Top 10 Holders Percentage." Anyone can see this number, and it's easily manipulated—a large investor might split their coins across 50 wallets, each holding only 1%, making the Top 10 appear "healthy." The correct approach is to use professional tracking software to analyze bubble charts and combine connected addresses (those with direct transaction relationships). If three wallets each holding 2% have transferred funds to each other, that's equivalent to one person holding 6%. Next, examine the purchase times of these related addresses—if they're concentrated on the same day or even within the same hour, do you really believe it's a coincidence?
Funding wallet analysis – Where did these wallets' initial ETH/BNB come from? If the gas fees from 50 wallets all come from the same CEX withdrawal address or the same funding wallet, even without direct transfers between them, it's highly likely they belong to the same person. If someone is paying to collect these funds, what do you think they're trying to do?
2. Transaction Volume Authenticity – Vol / Holder (OI): 24-hour transaction volume ÷ total number of holders = average transaction amount contributed by each holder. If a coin with only 800 holders has a 24-hour transaction volume of $2 million, averaging $2500 per holder, this is highly likely due to a few addresses engaging in rampant wash trading or bots. Why would someone pay to inflate transaction volume?
3: DEX Liquidity Pool Monitoring. Observe the increase or decrease of LPs (Liquidity Pools) – Market makers withdrawing or increasing LPs are signals of exiting the market or engaging in manipulative activities. If LPs are not locked (unlocked) or the lock is about to expire, the risk is extremely high. Simultaneously observe changes in LP depth. If the price is rising but LP depth is thinning, it indicates that market makers may be quietly withdrawing liquidity to reduce their losses when preparing to exit the market, and vice versa.
4. Reasonable Turnover – 24h Vol / Market Capitalization: This measures "what percentage of the market capitalization is traded each day." Looking at it hourly, if the trading volume suddenly spikes significantly higher than other periods, it indicates concentrated volume manipulation. Normal retail investor trading is relatively evenly distributed throughout the day; sudden spikes are likely a prelude to something going wrong. Furthermore, it's more valuable to look at net buy volume than total trading volume.
5: Number of Transactions vs. Trading Volume – Large Order Proportion: Look at the average transaction amount over 24 hours. If the top 10% of large transactions account for more than 60% of the total trading volume, the market is driven by a few addresses, and price movements depend entirely on these addresses. (A better method is to use the Gini coefficient to quantify the concentration of trading volume, ranging from 0 to 1, with closer to 1 indicating greater concentration). When these addresses remain inactive is more important than when they move.
6: Address/Account/OI growth rate vs. price change rate – Determine which stage the market maker is in. Based on the calculation of the first 5 indicators (processing, screening and calculation are essential), you can then analyze the data to determine which stage the target is currently in.
Accumulation Phase: Prices remain low and sideways or even slightly decline, with large on-chain addresses slowly buying in, and the number of wallets/accounts showing little change. The market maker is quietly accumulating tokens. (This excludes associated addresses.)
During the price surge phase: For example, if the price rises by 30%, but the number of wallets/accounts only increases by 5% → the chips haven't been distributed, and a few people are artificially inflating the price.
Distribution phase (most dangerous): Prices remain flat or even drop slightly, but the number of wallets/accounts increases (sometimes also reflected in the long/short ratio) by 20% → The big players are slowly distributing their shares to retail investors at high prices, making it seem like "the community is growing", but in reality, the big players are retreating.
The run has already begun: The price has fallen, but the number of wallets/accounts has not decreased → Retail investors are trapped, and the big players have already exited.
II. What happens after you finish watching?
Okay, you spent time confirming there's a bookmaker, and it's still in the xxx stage. Then what? Switch to another one? Switch to yet another one, and there's still a bookmaker. Because—
Third, the dealer is not a bug; the dealer is an integral part of the game's underlying structure.
What justifies a token's price increase? Pumping the price requires two things: tokens and capital. These two things together constitute pricing power. If tokens are not concentrated enough, and there is insufficient ownership, no one has the incentive to pump the price.
Concentrated shareholding is not a conspiracy, but a prerequisite for price manipulation. Without market makers, there is no market trend.
IV. What does the dealer use to win against you?
Pricing power is merely an entry ticket. What truly allows market makers to consistently win is their completely different trading style. You rely on intuition, while market makers use a systematic approach.
The market maker's cost consciousness: calculates the profit from pumping and dumping, and only acts when the EV (Earnings Value) is positive. Retail investors rush in based on screenshots.
The market maker's probabilistic thinking: continuously adjusting probabilities and position sizes. Retail investors repeatedly place bets.
Zhuang's manipulation of psychology: creating FOMO and using sunk costs to make you hold on indefinitely.
The advantages of market makers' tools: they can hedge, have cost/information advantages, and their operational dimensions and margin for error far surpass those of retail investors.
Fifth, why should retail investors win?
In the hands of the bookmaker, using their rules, retail investors cannot win. There is a complete asymmetry in information, tools, and psychology. But there is one asymmetry that can be broken.
VI. The biggest structural flaw of retail investors: they can only go long.
Without PERP (perpetual contracts), market makers can indeed only go long, but they don't need to go short. The reason is cost.
The market maker's cost basis is close to zero (gas fees or extremely low early prices). Even if the price drops by 90%, they still make a profit, just a smaller one. This ultra-low cost gives them a huge margin for error.
However, retail investors chase high prices during the FOMO phase, meaning their cost basis could be 50 times that of institutional investors. Your cost structure dictates that you cannot withstand drawdowns. Retail investors have neither short-selling tools nor a low-cost safety net. The only scenario where they can make money is: buying, then seeing the price rise, and selling before it falls.
One direction, one window, and the margin for error is almost zero. This is structural unfairness.
7. What if retail investors could also short sell?
When signals point to a distribution phase or a false boom—you don't just "run fast," you can short sell, turning the market maker's distribution into your profit. When the truth comes out, you'll be on the side of making money. Your analytical skills will finally no longer be wasted.
8. Mechanism Analysis: With short-selling rights, can retail investors control pricing power?
To state the conclusion directly: No.
The formula for pricing power is always: chips + funds. Retail investors are essentially a group with dispersed funds, operating independently. No matter how sophisticated the mechanism, it cannot turn a scattered group into a powerful force. However, the introduction of decentralized spot leverage and lending protocols is not to allow retail investors to "become market makers," but rather to break the "absolute monopoly" of market makers over pricing power.
From a mechanistic perspective, this reshapes the structure across three dimensions:
Creating "sell orders" out of thin air strips away unilateral control: In a pure spot market, if the major players don't sell, there's no selling pressure; they can manipulate the price simply by moving money from one hand to the other. However, with the intervention of short selling mechanisms, retail investors borrow tokens through over-collateralization and dump them into the market, turning previously "locked" dead tokens into active sell orders. This forces major players to increase their real capital costs for price manipulation. If they want to continue pushing the price up, they must use real money to absorb the orders created by the short sellers.
The symmetry of price discovery: piercing the "false narrative": Previously, when it was discovered that major players were distributing their shares or the narrative was disproven, retail investors could only "not buy," and bad news could not be reflected in the price decline. Short selling mechanisms allow retail investors to convert "negative information" into substantial sell orders, making price movements no longer a game of one-way lines drawn by major players, but a real result of the battle between bulls and bears.
The transformation from "zombie" to "hunter": The short-selling mechanism is actually accelerating the life cycle of Meme coin. This mechanism doesn't allow you to become the rule-maker, but it transforms retail investors from "victims who can only take the hits" into "hunters with guns in their hands."
9. But short selling is not a panacea – the risks you must know.
Shorting Meme coin carries extremely high risk, with theoretically no upper limit to losses. Market makers excel at short squeezes, deliberately driving up prices to trigger short covering and using your liquidated funds to further inflate the price. Even if your timing is wrong, you'll still lose money. Furthermore, poor liquidity, high slippage, and high short-selling costs make it extremely difficult.
Short selling isn't about "understanding the market and making money"; it gives you another option. You still need to manage your position size and set stop-loss orders. Short selling turns you from a "chip" into a "player," and players can lose—but they lose with more dignity.
at last
This article doesn't teach you "how to avoid the big winners," but rather helps you understand:
Market manipulators are everywhere; don't look for coins without them. The key is to determine which stage the manipulators are in.
The biggest disadvantage for retail investors is their singular focus. Market makers have a low-cost safety net, but you don't. If you understand the uptrend, you can profit; if you understand the downtrend, you can only run—this is illogical.
Short selling is the final piece of the puzzle for retail investors to go from being "harvested" to "getting a piece of the pie."
It's a weapon, not a talisman. Even if this gun carries the risk of exploding, having a gun and not having a gun represent two completely different levels of competition. What we need is "equivalent weaponry," allowing individual investors to also have the ability to engage in two-way competition.
