Whales manipulate the market by placing large buy-and-sell orders at closing prices.
Buy walls that go down and sell orders that go up, push prices down. This traps everyday investors who are long (thinking prices will go up) and helps those who are short (thinking prices will go down). Here is the first part.
Stop Runs and Flushes & Setting off stop orders
Whales drive prices past resistance points to set off stop orders, starting a chain of events: Price moves beyond specific points can activate stop-loss orders, which leads to further price drops. This domino effect causes fast and significant price shifts.
- Fast turnaround: After setting off these stops, whales bring the price back within the original range, grabbing stop liquidations and catching traders off guard.
Painting the Charts
Market movers create misleading chart patterns to fool traders. Buying when prices hit resistance or selling during price jumps creates patterns that small-time traders see as trustworthy signals. These false signals lead traders to make poor decisions based on inaccurate chart patterns.
Source: X
Range Manipulation
Whales move prices within a range to frustrate and trap traders:
- Reducing entries: Price manipulations make traders exit at a loss, especially those trying to time their entries and exits.
- Price consolidation stops after 4–5 touches: A range undergoes several tests, and if the price reaches a breaking point but turns back, this suggests manipulation. This pattern annoys traders who expect a breakout.
Fair Value Gap (FVG)
Heavy buying or selling leads to significant price movements and gaps on the chart:
- First jump: When the large players have significant buying or selling orders, the prices rise or fall, forming a gap in the chart.
- The following drop: After such a first jump, prices go down, which creates pressure on late entrants to close positions at a loss. It is beneficial to the major players that initiated the shift.
Stop Loss Hunting
Big players target groups of stop-loss orders to cause quick price shifts:
- Finding key points: Large traders identify clusters of stop-loss orders at critical support or resistance levels.
- Triggering stop orders: They push prices to specific levels with big buy or sell orders, setting off a domino effect of stop-loss triggers and causing quick and significant price shifts.
Tips to Avoid Market Manipulation
To protect yourself from these tactics, do research before you decide to invest. Quick decisions often result in money loss when someone’s messing with the market. Get a sense of the market’s liquidity. Before making a move:
- Ensure that the price movement is genuine and not resulting from manipulation.
- Look for sustained trends rather than sudden spikes or drops.
- Place your stop-loss orders at less clear points to avoid stop-loss hunters.
Setting stops at well-known levels makes them easy for manipulators to target. Go for trades with more volume to achieve more stability. Markets with fewer trades are more accessible to manipulate, as the big players can change prices without much effort.
Conclusion
Understanding and using these tactics can help you dodge pitfalls in the crypto market. Keep up with the news, stay alert, and don’t make quick choices without proper research.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.