On the afternoon of September 23, at 16:00, AICoin researchers conducted a graphic and text sharing on the topic of "The underlying logic of main force absorption, finally explained by someone! (Free membership)" in the AICoin PC-end - Group Chat - Live. This live broadcast aims to help everyone understand the underlying logic of main force absorption and help everyone correctly understand how to build positions at the bottom.
I. Principle of main force building positions and absorbing chips
First of all, let's get straight to the point. The underlying logic of main force absorption of chips is "relative volume shock, pulling up and absorbing chips". Many people want to build positions at the bottom like the main force, and then sell at high prices. But it is important to understand the principle of main force building positions and absorbing chips. Main force absorption of chips does not mean buying for themselves, but rather selling against the opposing market, and the initiative is not in the hands of the main force. Main force absorption of chips is different from direct buying by retail investors. Because of the large volume, direct absorption of chips will lead to price increases, which would be like making a wedding dress for others. The main force's way of absorbing chips is usually to wait for the opposing market to sell before picking up the chips themselves, so as not to cause a rapid price increase. Contrary to popular belief: when you sell, I absorb chips; when you buy, I sell!
Generally speaking, there are two ways for the main force to absorb chips: relative volume shock - pulling up and absorbing chips; bottom consolidation - absorbing chips at low levels.
Relative volume shock - pulling up and absorbing chips: Absorbing chips by pulling up through shock, which is the bottom band market that we see. Pulling up through shock is a shortcut and has a short cycle. The main force creates fluctuations and upward trends at lower prices to attract short-term investors to buy low. When these short-term funds see profit opportunities, they are willing to sell quickly and leave, making it easier for the main force to absorb chips. In simple terms, it is to let the funds buying low make some money and then leave quickly. The main force that absorbs chips in this way must be strong! Because the cost of pulling up in this way is high. However, relatively, this method has a short profit cycle. Once the absorption of chips is completed, there will be a rapid upward trend!
After understanding the principle of main force absorption of chips, we also hope that everyone can stabilize their mentality when trading. There are many factors that cause consolidation. On the one hand, do not engage in such high-risk contract operations, and on the other hand, pay more attention to the main force.
- Case sharing
Let's start with a recent ETH candlestick chart: 
A more vivid metaphor is the dragon rising from the sea bottom - pulling up and absorbing chips. The dragon rising from the sea bottom refers to the dragon tail falling with shrinking volume, and the dragon body rising with small shadows and small positive candles. This small shadow and small positive candle rise is the interval where the main force shockingly absorbs chips. Once the absorption of chips is completed, the price will surpass the dragon tail and start the dragon head rising trend.
The dragon rising from the sea bottom consists of the dragon tail, dragon body, and dragon head, which is a bottom reversal form and a highly successful move in the market. The dragon tail and dragon body of the dragon rising from the sea bottom have strict requirements for volume, form, quantity, and time period. The dragon rising from the sea bottom is a low-absorption tactic that can be used all year round, and is one of the most popular market tactics. Its underlying logic is precisely relative volume shock, pulling up and absorbing chips. This method has a high cost, and once the dragon rising from the sea bottom is completed, there will be a rapid upward trend.
Next, let's talk about bottom consolidation - absorbing chips at low levels. Absorbing chips through consolidation is a traditional method. When the price comes down from a high level, the chips are basically in the hands of retail investors, and all retail investors are trapped. At this time, the trading volume will be very low. What the main force needs to do is to reacquire the chips from retail investors, and the price will remain at the bottom consolidation level. This method is relatively slow. Sometimes the main force needs to hold a bottom position for several years. In the world of cryptocurrencies, one day is like a year. If you can hold on, it's a victory for retail investors!
Next, let's talk about the misconceptions about the main force absorbing chips: It is not that once it absorbs chips, the price will not fall, or once it absorbs chips, the price will definitely rise! At the bottom, even if the main force has absorbed enough chips, it cannot immediately push the price up, it needs to wait for the right opportunity. So, for the price of a cryptocurrency to rise, it generally needs to meet some prerequisites. First, there are many tools to analyze whether the main force is absorbing chips. Everyone can judge through the volume indicator. The prerequisites for an upward trend are: either there is news, or there is a theme, or there is an oversold rebound; it cannot rise for no reason. The logic is simple, the ultimate purpose of pushing up the price is to sell, without anyone buying, just pushing the price up is meaningless.
- Advanced practical methods
Next, let's combine market data and volume indicators to teach everyone how to look at specific indicators. Large orders pressing down to absorb chips is a common market phenomenon. Characteristics of pending orders: There are relatively large sell orders above the first sell order, and the buy orders below are relatively normal, and the price does not fall. The main force deliberately places many large sell orders above, giving investors the feeling that there is heavy selling pressure at the upper limit, and the price may fall. "Large orders pressing down to absorb chips" is a common tactic used by the main force to manipulate the market and secretly absorb chips. Its purpose is to create the illusion of selling pressure, to lure retail investors to sell in panic, while the main force collects chips at lower prices.
Everyone should mainly understand the following characteristics:
[Characteristics of pending orders] Observe the situation of pending orders on the sell side, especially above the first sell order. If there are abnormally large pending orders above the first sell order, and the total volume of these pending orders is significantly higher than normal, you need to be alert. At the same time, the buy orders are relatively normal, with stable buying intentions and not large in volume.
[Price change analysis] Although the pending orders show heavy sell orders, theoretically they should create pressure on the price to make it fall, but in reality, the price does not significantly fall, and may even show a stable or slightly upward trend. Observe the intraday chart, if the price remains stable or slightly rises, this may indicate the main force's control of the market.
[Behavioral analysis of the first buy order] Pay attention to changes in the first buy order. If, under stable prices, there are frequent small buy orders at the first buy order, this usually means that there is a force actively absorbing the sold chips.
Low trading volume and large pending order volume may be signs of pressing down to absorb chips. This is the core and can be seen intuitively. Low trading volume - this means that actual trading activity is not active in the current market. Trading volume refers to the quantity of transactions completed within a certain period of time. Low trading volume may indicate that there are fewer market participants at the moment, or that there is a heavy wait-and-see sentiment in the market. Large pending order volume - pending orders refer to buy or sell orders placed by investors that have not yet been executed. A large number of pending orders may indicate that there are a large number of buy or sell orders waiting to be executed at a certain price. Signs of pressing down to absorb chips - pressing down usually refers to behavior that affects the market by using a large number of sell orders (or low-price sell orders) to keep the price at a low level. The purpose of this operation is usually to suppress the price, make other investors feel pessimistic, induce them to sell their chips; absorbing chips is when, after the price has been suppressed to a low level, the operator (usually referring to the main force or large funds) will start to buy a large amount, thus collecting as many chips as possible at a low price.
(Above: Volume indicator)
(Above: Pending order situation)
(Above: Real-time order imbalance and order ratio)
Let's combine our ace - the main force large order tool and the volume to look at them together. Look at the volume and whether the label is positive or negative. Check the main force large orders and continuously monitor the situation of large orders and combine them with the trading volume.
The above is all the content of this sharing.
Thank you for watching, and we hope that every AICoin user can find a suitable indicator strategy and have a rolling source of wealth!
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