Cryptocurrency market manipulation. Part 5 — Dependency.

It is unclear how this method in current realities is applicable to crypto-currencies, but it’s worth talking about because perhaps some of the participants actually noticed some dependencies and try to play on them.

It’s no secret that in the securities markets, especially at the Russian market, the dependence of stock quotes on oil prices is clearly traced. In a normal situation, this is a direct dependence. The price of oil is up, stocks are up, the price is down, and the stocks are down. In the world of crypto currency, we think it’s possible to equate Bitcoin with the base asset — oil, and all other coins are dependent assets. After all, if the price for Bitcoin is growing, then everyone is fairly waiting for the growth of the rest of the market and vice versa.

The largest and most powerful manipulators try to play on such links, simultaneously operating with two assets, between which the crowd sees “dependence.”

The essence of the method is to start moving assets in the opposite direction. We will explore it on a concrete example. Suppose the monster decide to buy a lot of Ethereum at low prices using this method. In this case, he begins to push the price on Bitcoin up, but at the same time keeps or even lower the price of Ethereum down as much as he can. It is clear that the crowd, not believing the happiness that has fallen on them, begin to massively buy Ethereum coins with the thoughts that the logic is violated on the market and the “standard” is growing, then the “Ether” should soon go into growth. However, they are waiting for a big bummer :).

After the satisfied traders have thoroughly purchased the coins or the monster has run out of funds to continue to lower Ethereum, he is dropping the price of Bitcoin. The market comes to a normal state and since no one is trying to hold the price of Ethereum right now, it begins to fall due to the previously described dependence.

The crowd, realizing how hard they were mistaken, expect that, following Bitcoin, Ethereum also will continue its fall. They begin to sell what it has recently gained at “low prices”, thereby accelerating the fall in an avalanche manner. At this point, the manipulator restores its losses in coins spent on organizing the fall of Ethereum during the growth of Bitcoin. And then he repeats everything exactly the opposite, or simply rearranges the price upwards.

For the monster is much easier to increase the price of an asset because he has an actually unlimited resource of money and can buy absolutely everything, whereas in the falling game he spends a limited resource — coins, which are still a finite number. To restore coin supply that he needs to lower the prices he uses the techniques described in previous articles. The party does not play out for a day, it lasts for weeks or even months.

So, the crowd does everything by themselves, they are just pushed a little bit in the right direction :). In fact, this is quite an interesting and profitable situation for investors (not to be confused with speculators!), as it gives them good entry points into assets. The right investor does not pursue immediate profit, he chooses a promising coin on the basis of fundamental criteria, estimates its real value in its view and awaits a good entry point. The market does not tolerate fuss, nothing terrible will happen if you don’t buy assets today or tomorrow, simply because the money burns your pocket. The price will necessarily return to the previous level, will be higher and lower. Wait, as if you’re fishing, and cut it when it’s profitable. Only this way you can beat the evil manipulator.

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