Cryptocurrency market manipulation. Part 1 — Introduction.
The market of cryptocurrency is just emerging, but it is already a subject to manipulation by large players, like any other market where securities are traded.
It is important to note that until recently the market of crypto currencies was populated mainly by miners and сrypto anarchists, and therefore their trade was relatively flat and not tense. But the arrival of big money and a multiple growth of the market didn’t remain unnoticed to the sharks of investment trade. They are already here and ready to gladly take your money away by sophisticated methods of market manipulation.
Market manipulation is essentially the organization of the movement of an asset in a direction set by manipulator. He can force small investors to sell everything or buy up an asset, it depends on his desire and strategy.
There are several ways of market manipulations: by news background and by technical receptions or a combination of these methods.
News manipulation: it is a game of rumors about some events that significantly affect the future of an asset (coin). Moreover, in regulated securities markets such manipulations are direct violation of the laws of almost all countries and are subject to investigation in order to find the source of such rumors and punish them. There is no regulation on the crypto currency market, which means there is no responsibility, and it is very important to examine in detail any news related to this area, including their sources, since even large news agency can simply broadcast the “rumor” without going into details.
In fact this is a classic and not complex reception. Manipulator having a large volume of a particular coin, wants to sell it profitably and broadcasts the news that this coin will soon become a “global payment service”, the crowd amicably begin to believe in the news and buy this asset, meanwhile manipulator slowly sell it by small lots. Opposite case — he needs to collect a large amount of assets from the market, but don’t want to do it at inflated prices. In this case the news comes out that “the coin was bananed”, “the founder was imprisoned”, “the authorities of some country will punish all owners of the coin”, “someone died” and all that sort of thing. Frightened crowd in a hurry sell everything at a low price, meanwhile satisfied manipulator is buying all this up and activate price rising scenario.
Watch the news, but don’t believe them blindly. Research all the nuances, sources, facts and take informed decisions on buying/selling an asset.
This kind of manipulation is relatively simple. Much more sophisticated technical manipulation, which received active development due to the fact that the news method is quite easy to investigated by law enforcement agencies.
Technical manipulations: based on technical price manipulation, by buying assets to bring the prices to the desired level, keeping the so-called “resistance levels” and “levels of support”, swinging the market, “puncturing” the market, removing conditional orders (for example, “Stop Loss “) and so on. The news background here is used as a support tool, and it is not fake news but real. Manipulator possesses a big financial resources and able to properly present news and make something out of nothing, thereby covering up his actions behind the crowd actions.
There are a lot of ways and each of them is truly interesting. In this series of articles, we will analyze in detail the technical methods of “deception” as most interesting in our opinion.
If you have any questions — don’t hesitate, write to us at https://t.me/fidcom.
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