“With thousands of new tokens launching monthly, liquidity is diluted and communities are fragmented. Rather than fostering growth, this environment creates a predatory trading dynamic where only deeply connected users can avoid becoming exit liquidity.”

“With thousands of new tokens launching monthly, liquidity is diluted and communities are fragmented. Rather than fostering growth, this environment creates a predatory trading dynamic where only deeply connected users can avoid becoming exit liquidity.” 

https://paragraph.xyz/@0xbasil.eth/farcasters-path-forward?referrer=0xd76fF76AC8019C99237BDE08d7c39DAb5481Bed2

Co-founder, Scout Game. 
https://scoutgame.xyz

Even experienced traders can fall into this cycle, especially when social media hype, like on twitter, affects their decisions.
Fomo and group thinking can push even seasoned traders into bad positions, making them exit liquidity for bigger players:(