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Exit liquidity

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This is normally you. Influencers are often helpful in making you exit liquidity.

Whales have large bags of tokens they want to sell at some point. Often the liquidity on their favourite DEX and CEX is relatively low compared to the size of their bags.

Therefore, they can have trouble realizing profit: if they sell their heavy bags it will crash the price and profit might actually turn into a loss.

What is needed for them is exit liquidity, i.e. fresh capital and their owners that can buy their bags for a good price.

Cue the influencers, who more often than not, are the actual whales. They start promoting the tokens they want to sell, disguising the pump as alpha. The resulting FOMO creates a new influx of fresh liquidity which the whales can use to exit their positions with profit.

Once the Exit Liquidity realizes that they have been used, they might panic sell themselves. This will in turn crash the price as no one is buying and everyone starts selling.

If the whales only wanted to realize some profit, they might BTFD and re-buy their positions at a much lower level. Rinse and repeat.

It is important for your physical and economical health to avoid being exit liquidity. You will likely buy the top and might become one of the bagholders. IYKYK.

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