How to spot Pumping and Dumping

[nwbitcoin]

I have noticed how a pattern emerges between the value of BTC and the value of other crypto coins - especially at the moment with LTC going a bit higher because of some news involving MTG - maybe!

Anyway, The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.  However, Bitcoin is the wild west!

This post isn't an instruction guide - its to collect advice from everyone on how to spot such manipulation.

First thing I notice is that the price is going up while trade volume is very low. 

Secondly, you will have people buying a handful of coins at strange valuations and this continues until you get to a certain price where a load of orders are waiting to be processed.

Anyone else notice a few indicators of price manipulation?

[1715366870]

1715366870

[bitchess]

In my opinion the only indicator of market manipulation is an excessive discrepancy of market prices from fundamental prices.

In the case of bitcoin it's hard to tell because the equation for fundamental prices is not yet solved (at least based on my research.)

[odolvlobo]

Anyway, The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.
... 
Secondly, you will have people buying a handful of coins at strange valuations ...

Are you sure you understand how markets work?

[old_engineer]

The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.  However, Bitcoin is the wild west!

[citation needed]

[BitcoinAshley]

You don't need to spot pumps and dumps unless you're daytrading.

If you're using bitcoin as a store of value and a currency, rather than a speculative vehicle, you can just buy and hold. Just look at the trendline to see how well that has treated people thus far (VERY well )

So what if your bitcoins are $160/pop one day then $125 the next? The day after they'll be $135 again, few days later they'll be $185 then they'll be $156 the following week. If you really minded, you wouldn't have invested in bitcoins. Volatility (helped along by pump and dumps) are the growing pains of the market, since there are so many concentrated positions at this point. Every time a dump happens, some of those positions become slightly less concentrated.

As someone who's not a day trader, here is the extent to which you need to be aware of pump and dumps: If I'm going to buy something (say, some gold bars or silver coins from Amagi Metals, or some clothes, or a laptop) and the price has been stable for a few days, I just buy whenever I feel like it. If the price has been very volatile, I wait till a day or two into a rally, before the correction.

The pump and dumps will continue until the coins have dispersed quite a bit more. So the best thing we can do right now is learn to live with it, and/or sell to strength during rallies to temper exuberance.

[nwbitcoin]

The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.  However, Bitcoin is the wild west!

[citation needed]

price   LTC   BTC
0.0299   1.75016274   0.05232986
0.02982   1.62172702   0.04835989
0.02977   0.18598981   0.00553691
0.02976   0.47911415   0.01425843
0.02973   188.97499769   5.61822667
0.02972   12.004   0.35675888
0.02971   5   0.14855
0.0297   500   14.85
0.02969   0.18704299   0.0055533
0.02967   11.81170832   0.35045338
0.02966   80   2.3728
0.02965   0.1858791   0.00551131
0.02964   3   0.08892
0.02963   365   10.81495
0.0296   6.012   0.1779552
0.02951   8.75   0.2582125
0.0295   25   0.7375
0.02949   0.18915448   0.00557816
0.02948   52.75371975   1.55517965
0.02947   352.76730486   10.39605246
0.02945   2.72005834   0.08010571

This is the current buy orders on BTC-e for LTC using BTC

Notice how many very small orders are on there for less than 1 LTC
That doesn't seem to make sense to me
Then you have a few big orders, which is a collection of all the orders at that price.

Is this enough evidence?

[Pruden]

Well, if this is about altcoins, I have after endless days of struggle devised an algorithm that detects Pumps&dumps in these "penny stocks".

It consists mainly of reading Fontas' tweets.

[dykast]

Well, if this is about altcoins, I have after endless days of struggle devised an algorithm that detects Pumps&dumps in these "penny stocks".

It consists mainly of reading Fontas' tweets.

Don't underestimate the power of the trollbox on btc-e

[meangreen]

how to spot a pumper....vaseline within arms-reach of the toliet
   "   "    "     "   dumper...smells like shit in the bathroom

[odolvlobo]

The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.  However, Bitcoin is the wild west!

[citation needed]

price   LTC   BTC
0.0299   1.75016274   0.05232986
...
0.02945   2.72005834   0.08010571

This is the current buy orders on BTC-e for LTC using BTC

Notice how many very small orders are on there for less than 1 LTC
That doesn't seem to make sense to me
Then you have a few big orders, which is a collection of all the orders at that price.

Is this enough evidence?

That's not evidence of anything. Are you sure you understand how markets work? Is it possible that you don't realize that most (if not all) of those bids are by different people?

Also, I think you don't know what "pump and dump" means. Please read this:

"Pump and dump" is a form of ... fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price.

[David M]

Anyway, The practice of increasing a price through buying a small quantity at increasingly higher price, has been illegal in the money markets since Noah was a boy.  However, Bitcoin is the wild west!

I have no idea what this means, but it smells really bad.

Every time I buy "a small quantity at increasingly higher price", I hope it goes even higher, otherwise I am a moron with dreams of insolvency.

That sound like DCA to me.  Which has been a trading strategy since "Noah was a boy".

[nov]

Could you share more details or share the algorithm, please?

Well, if this is about altcoins, I have after endless days of struggle devised an algorithm that detects Pumps&dumps in these "penny stocks".

It consists mainly of reading Fontas' tweets.

[MatTheCat]

In recent times, you can spot the pumping and dumping by observing the way that the price moves around.

Very little fresh capital is coming into Bitcoin at this time.

This is why each resistance level falls short of the last. The whales use their clout to start a move, Joe Bitcoiner joins in seeking to profit and it is he that the Bitcoin whale-rat sells to as we approach the resistance levels, and then nobody is willing to buy in as the resistance levels are reached, as these levels are approached  on spikes and nobody wants to buy on spikes. Nobody wants to buy in when the spike corrects and consolidates either, so we get these periods of ultra low volume. The whales are not going to manipulate the market to new highs because they know that not enough fresh capital is coming in and using their capital to push Bitcoin to new highs would mean them losing money. None of us are going to buy enough Bitcoins to push Bitcoin over the resistance levels because we are not fkn stupid either.

Thus the market is in recession, and the pump n dumping has been replaced by a policy of price upholding, resulting in a chasm of disagreement between the Bid/Ask walls, resulting in ultra low volume, allowing huge pressure to bid up at either side, only for sporadic HUGE trade orders to be triggered into Bid wall out of the blue, often moving the price down no more than a couple of bucks, even when the next 0.001 of trade knocks the market a further $15 back.

This manipulated price stability is not being done to encourage retailers to deal with Bitcoin as some like to think. It is being done to buy the big-boys time to liquidise and take profits on a proportion of their Bitcoins at as high a price as possible. The only factor that can and will move the price in the time being, is the Huobi/China factor, which is probably exactly what the big-boys are scared off and running from. Why not take profits now, if you know for sure that Bitcoin is going to heavily correct and their is nothing that can be done to avoid it?

[T.Stuart]

... if you know for sure that Bitcoin is going to heavily correct and their is nothing that can be done to avoid it?

You've been saying this for so very long MatTheCat. But I have never seen you give a prediction of timescale. Of course, whenever a couple of red candles appear on the charts you shout that this is it (and have been proved wrong 100% of the time), but that's not what I mean.

Give us an estimate for when this heavy correction is going to happen. Otherwise it's just the same old FUD that's been coming out for weeks now!

[MatTheCat]

... if you know for sure that Bitcoin is going to heavily correct and their is nothing that can be done to avoid it?

You've been saying this for so very long MatTheCat. But I have never seen you give a prediction of timescale. Of course, whenever a couple of red candles appear on the charts you shout that this is it (and have been proved wrong 100% of the time), but that's not what I mean.

Give us an estimate for when this heavy correction is going to happen. Otherwise it's just the same old FUD that's been coming out for weeks now!

You have been screaming all time highs that have never came. Instead, what he have had is a classic post crash 'return to normal' scenario minus the final capitulation.

After I actually did a good job of bagging 'cheap' $500 Bitcoins but then showed the nerve of a girl and pissed all those coins away in a panic, I was quite emotionally disgusted. Of course we were gonna get a 'return to the normal'. I never missed out on all of it, but I did miss out on half of it. I never had half the understanding of how this market works back then as I do now. I have spent the last few days watching the markets like a guard dog and have done pretty well with my short bet.

I am not making this call out of negative emotion, but because I really believe that I am beginning to be able to read the script.

As for timing, the 'final capitulation' is going to be entirely based around China's exit from Bitcoin, so sometime Feb or very early March at a push.

[aminorex]

Very little fresh capital is coming into Bitcoin at this time.

Citation needed.  I see about 6mm USD/diem flowing on fiatleak right now.

[aminorex]

As for timing, the 'final capitulation' is going to be entirely based around China's exit from Bitcoin, so sometime Feb or very early March at a push.

How is China, by which I take it you mean roughly 1.3bn PRC residents, going to "exit" Bitcoin?  Why do you believe in such a notion?

[T.Stuart]

... if you know for sure that Bitcoin is going to heavily correct and their is nothing that can be done to avoid it?

You've been saying this for so very long MatTheCat. But I have never seen you give a prediction of timescale. Of course, whenever a couple of red candles appear on the charts you shout that this is it (and have been proved wrong 100% of the time), but that's not what I mean.

Give us an estimate for when this heavy correction is going to happen. Otherwise it's just the same old FUD that's been coming out for weeks now!

You have been screaming all time highs that have never came. Instead, what he have had is a classic post crash 'return to normal' scenario minus the final capitulation.

As for timing, the 'final capitulation' is going to be entirely based around China's exit from Bitcoin, so sometime Feb or very early March at a push.

Bullshit! I have not been screaming "all time highs". I have been saying sub-1000 until the very end of this month! Look at my weekly thread: https://bitcointalk.org/index.php?topic=397534.0

"Sometime Feb or very early March" is just a little too vague for me. I guess by giving yourself over a month you are counting on something to come along and prove you right. But it won't happen - there is no heavy correction to come. EDIT: Why no crash? Market sentiment is overall too good.

[segeln]

But it won't happen - there is no heavy correction to come.

and to add: what should going to be corrected?
The Chinese-Affair ist already corrected with relative stable prices this year

[jayspin]

Very little fresh capital is coming into Bitcoin at this time.

Citation needed.  I see about 6mm USD/diem flowing on fiatleak right now.

How do you know that's fresh capital? Does fiatleak have some super secret insight into each of the exchanges so it can distinguish fresh fiat from old fiat? And even if it really had that, which it doesn't, would it only show the fresh fiat transactions and ignore the rest?