The most torturous thing in the crypto world has never been pure sharp declines, but the confusion over whether the current drop is an opportunity to buy in or a hidden landmine set by the market makers.

Recently, a trader shared his experience: he chased a hot coin and was caught in a 25% loss on the same day, followed by an 8% drop the next day. He was frantic, repeatedly asking himself—are the main players cleaning out weak hands to shake out the weak holders, or are they already dumping and fleeing?

Although both are declines, the underlying logic of shakeouts and dumping is vastly different. The former is about clearing out weak hands before a rally, while the latter is about the main players cashing out and escaping for profit. The difference between the two is actually hidden in the details of trading volume.

**Low-volume decline vs. High-volume sell-off**

A clear characteristic of shakeouts: prices drop but trading volume shrinks. This indicates that holders are not panicking and are unwilling to sell cheaply. During rebounds, volume actually increases as funds quickly flow back in—like rain making the road slippery, but the surface is still wet and the foundation remains solid.

Dumping, on the other hand, is the opposite. During declines, there are massive sell orders, as if the market is dumping at any cost. Each rebound is just a show to lure in buyers, with volume diminishing each time.

There was a coin that started weakening from $3.20, with a seemingly gentle daily decline, but the trading volume remained high. Each rebound failed to attract follow-up buying—this is a typical dumping rhythm. The price hadn’t collapsed yet, but the main players’ steps had long since stopped.

Once you understand the language of volume, you can distinguish whether a decline is just a scare shakeout or the main players truly fleeing.