What does "sweeping chips" mean as commonly said by market makers?

I will only explain this once, so pay attention.

The "pump" in the market value management process of legitimate projects, filled with games and calculations, is completely different from the "pump" of meme coins that skyrockets and then plummets to zero without any skill.

The complexity of the former requires market makers to have extremely high psychological skills and secondary market gaming techniques.

Currently, the price of M coin is $0.03, and they plan to pump it to $1, a 30-fold increase.

The project team currently has a cash reserve of $10 million.

❌❌ Negative Case Study ❌❌

1. The market maker spends $1 million to pump the price from $0.03 to $0.10, a 3-fold increase.
2. After reaching $0.10, a large number of retail investors suddenly start selling, quickly pushing the price back down to $0.05.
3. It is estimated that many retail investors bought a lot at $0.03 in the two days before the market maker's pump. Now they see the price has tripled, so they all sell to the market maker, taking profits and exiting.
4. Retail investors all made a 3-fold profit and left, while the market maker lost $500,000 to the retail investors. The final market effect is actually $0.03->$0.05, but $1 million in cash was wasted.

✅✅ Positive Case Study ✅✅

1. The market maker first spends $100,000 to pump the price from $0.03 to $0.04 and finds that no one is selling.
2. Then they spend another $100,000 to pump the price from $0.04 to $0.05.
3. Retail investors start to sell.
4. It is estimated that many retail investors bought some at $0.03 in the two days before the market maker's pump. The price is pushed down to $0.035 by retail investors.
5. The market maker starts to let the price drop to $0.014, crashing all the way down to $0.024, looking like it’s about to go to zero.
6. Those retail investors who bought at $0.03 but didn’t sell at $0.05 start to regret it, seeing no signs of a price bottom, and have to bear the floating loss.
7. The market maker starts to let the price recover from $0.024 to $0.031.
8. Retail investors finally break even; those who bought in step 4 will panic sell.
9. The market maker pumps the price back from $0.03 to $0.04 and finds that selling pressure appears again.
10. The market maker has to repeat steps 5 to 7 several times, continuously sweeping chips.

When will the chip sweeping end?

The Nth time the price is pumped from $0.03 to $0.04, if they find that the selling pressure gradually decreases until it becomes zero, it indicates that the external funds' chips between $0.024 and $0.04 have been "swept" clean, and there are almost no unknown chip costs in this range for the market maker.

11. After cleaning up the chips between $0.024 and $0.04, the next step may be to sweep chips in the higher price range of $0.04 to $0.06.

It’s like climbing stairs step by step; after cleaning one step, they move up to the next. If it’s not clean, they go back and sweep again.

Ultimately, they will clean up the retail investors' chips on every step, maximizing cash utilization.

From $0.03 to $0.05, it ultimately only cost $250,000.

——————————————

Concept:

Chip sweeping is when market makers/whales use the smallest possible capital cost to have retail investors hand over their chips within a relatively small price fluctuation range, ultimately achieving higher control and lower market value management losses.

Functions:

1. Detect the chip costs of external funds in the market.
2. Reduce their own market value management costs.
3. Ensure that retail investors cannot obtain low-priced chips in subsequent market-making cycles.
4. Ensure that there will be no unknown selling pressure above.
5. Detect wash trading.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。