Why does it always skyrocket once before a sharp drop? Let's discuss it all at once today The following three charts show the bear markets of 2014, 2018, and 2022, with a probability of over 90% that there will be a surge before a sharp drop, which will attract many buyers to sell and then plummet again The core reasons are as follows: 1. Main players/institutions/large players are attracted to sell at high prices and end up selling in excess Big funds have already accumulated a large number of chips at a high level, and if they want to cash in profits, they will immediately trigger panic and stampede, leading to their inability to sell at a good price. 2. Technical/emotional overbought rebound The market has been declining for some time → many people are short or light positions → a slight positive news triggers retaliatory short covering and chassis copying entering → forming a brief but fierce V-shaped rebound. However, due to the lack of a true reversal in fundamentals/liquidity/major trends, the market rebounded to near pressure levels and saw a frenzy of selling in profit taking and previously held up markets, continuing to hit new lows. 3. Short covering+counter selling after forcing short positions A large number of short positions → triggering stop loss/margin call when prices rise slightly → forming a forced bearish waterfall buying trend → short-term price surge. But this wave of buying is "forced", not a true long position → once the short positions are filled, the real selling pressure (deteriorating fundamentals) will regain the upper hand → the price will reverse and plummet. Before and after the US stock market circuit breaker in March 2020, and before multiple flash crashes in the cryptocurrency market in 2022, there were instances of this' last rise '. 4. Illusion caused by liquidity/algorithm/option Gamma squeeze: Commonly seen in the US stock market: a large number of put options → market makers need to buy stocks for hedging → price increases → more Gamma positive feedback → accelerated rise → but hedging demand disappears after expiration → sharp decline. This is not a 'lure to excess', but a byproduct of the derivative mechanism, but the result also looks very similar to a lure to excess. Summarize the most common logic in one sentence: Big capital wants to withdraw from the high position completely → someone must take over at a higher price → so it is necessary to create another false impression of "continuing to rise" → lure the last optimistic person in → run after selling → no one to relay → plummet This is not a market conspiracy, but the inevitable result of profit driven nature, information asymmetry, and herd behavior. Only December 2018 is particularly special, as it plummeted sideways because this position has been sideways for 9 months without falling below it. If it doesn't fall below here, the long leverage must be liquidated, otherwise the main force will have to work for large market players and institutions There is a rule in fortune telling that a person will also experience a reversal of direction before changing their luck For example, in the next 10 years, good luck will come, but before that, you will be very unlucky. Nothing will go smoothly, drinking cold water will be choking, and no matter how hard you try, you will still be poor and destitute If the 10-year big luck you have recorded is bad luck, the first 1-2 years will be very smooth for you. You are already floating in the sky, and I have experienced all of what I have said and can empathize with it