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🃏 Cryptocurrency Market Manipulation : Kevin Pan

Many suspects that crypto markets are rife with market manipulation as it is highly profitable and oftentimes free of consequences. There are four major ways crypto markets can be manipulated:

1⃣ Spoofing

Spoofing is to pretend to have an intent to execute a specific trade in order to affect market sentiment

Oftentimes done with setting large orders that don't get filled and are immediately pulled

Fake buy or sell walls can drive the price

Especially common in markets with margin trading

2⃣ Short and long squeezes

A short or long squeeze occurs when a price is pushed upwards or downwards by a cascade of margin calls

In cryptocurrency markets, where margin trading is popular and regulations loose, short and long squeeze hunting is common

3⃣ Pump and dumps

A small group of traders gets a larger group to buy into a crypto which drives up the price and attracts outsiders, then the original small group exits at an expense of the outsiders

Manifests as a sudden rise in price that's followed by a complete retracement in a short time period

Often coordinated through Telegram groups

4⃣ Wash trading

Creating fake trading volume in a market to signal false interest

Traders can do this by buying and selling amongst themselves to artificially increase trade volume

Especially dominant in exchanges with low fees and in altcoin markets