Retail investors in the crypto circle often have a big misconception: as soon as the price drops, they curse the whales for targeting their small holdings. But in reality, the goal of the whales' shakeout is never to snatch retail investors' coins.

What is the true purpose of a shakeout? Simply put, it's "changing positions"—clearing out low-cost retail investors and leaving long-term holders to pave the way for subsequent price increases.

Let's take a real case as an example. A small-cap coin initially priced at $1.3, with a circulating supply of 12 million coins, nearly 70% held by retail investors. A private fund bought 3.6 million coins but kept silent. There's a reason behind this. If they directly push the price up violently to $1.6, retail investors will panic sell en masse, and the private fund won't be able to handle the sell-off, ultimately leading to a crash.

Therefore, whales usually play a "three-act play," with each step precisely targeting retail investors' psychological weak points.

**Step 1: The Gradual Bottoming Phase**

The price drops 2%-3% daily, trading volume is sluggish, and news is scarce. Retail investors start to panic—could it go to zero? Fear drives many to sell. The whales seize the opportunity to accumulate 500,000 coins in the $0.95-$1.00 range.

**Step 2: Sharp Drop to Trap Bottom Fishers**

The coin price suddenly plunges to $0.75, then quickly rebounds to $1.00. Retail investors follow the trend to buy the dip, only to be hammered down to $0.68. Those caught are forced to cut losses, and the whales continue to accumulate coins.

**Step 3: FUD Amplifies Panic**

Rumors spread—project team withdraws, big players dump, team disbands. The price falls all the way to $0.52, with retail investors losing 60%. They finally capitulate and sell off. The whales buy 6.2 million coins in the $0.50-$0.55 range.

After these three steps, retail investors are cleared out, and the whales' holdings are concentrated. At this point, most of the coins are held by long-term believers, and selling pressure is naturally low. The space for a price rally opens up.

Next time there's a sharp drop, there's no need to rush and curse the whales. It might just be the night before a major market move.