Everyone in the crypto circle will eventually face the same dilemma—seeing the K-line drop by 30%, is it a bottom-fishing opportunity or a signal to escape?

Recently, I’ve seen many people stumble into this trap. A friend hurriedly asked me, "This coin has dropped 30%, is it still okay to add to my position now?" I glanced at the K-line pattern and had a sense—another example of mistaking a clear distribution signal for a shakeout opportunity. As expected, adding at that moment led to immediate deep loss.

Stories like this play out in the trading market every day. Instead of gambling on the market, it’s better to understand what the main force is really up to.

**Shakeout vs Distribution, fundamentally different**

The logic of a shakeout is simple—main players haven’t collected enough chips yet and dislike retail investors who hold unstable positions on their chips. So they deliberately create panic, shake out those with poor mentality, and meanwhile buy back more at low prices, laying the groundwork for a future rally. In plain terms, this is the main force "clearing the field."

Distribution, on the other hand, is the opposite. At this stage, the main force is already smiling happily; their only goal is to offload a large amount of high-priced chips to the market’s buyers and then leave gracefully. This is the main force "cashing out."

**How to tell? Watch how the main force treats the bottom line**

This is the most direct judgment point. During shakeouts, the main force will fiercely defend a key support level—because falling too deep would also trap themselves, which is not worth the loss.

But during distribution, it’s different. The main force doesn’t care where the price drops; they hit the market mercilessly because their chips are already mostly distributed. They couldn’t care less.

**Observe the K-line texture**

Shakeouts usually show: limited decline (usually around 20-30% rebound), with repeated small rebounds during the decline, as if the main force is "testing the market." The volume exhibits a "shrink-then-expand-shrink" rhythm, appearing restrained.

Distribution’s K-line has a completely different vibe: continuous decline, weak rebounds, volume remains high—retail investors are frantically fleeing. At this point, volume doesn’t shrink because everyone is cutting losses.

**The most heartbreaking point**

Many people ask the wrong question. Instead of asking "Is this a shakeout or distribution," it’s better to ask "How much chips does the main force still hold at this price?" If the main force has already completed a large chip distribution through previous rallies, then the current decline is most likely distribution. Conversely, if their accumulation phase isn’t over and the decline isn’t too deep, then the probability of a shakeout is higher.

Remember: after eight years in the crypto world, those who get trapped are not lacking knowledge—they are greedy. They see clear distribution signals but still try to bottom-fish. The most terrifying thing is using the phrase "This must be a shakeout" to justify their own re-entry decisions.