We know Bitcoin was created as a decentralise Blockchain and its value is base on how we the users value it but its still a known fact that people can be swayed by those big names like Elon Musk and others who are called influencers.
while there are others who try to control the market for their own good, they are called trading manipulators they use various schemes to go against the trustworthiness of cryptocurrency and bitcoin.
This as affects some investors trust on the market and some exchanges, even on cryptocurrency as a whole though this is not only people are not only present on crypto market, they are also present in stocks and others.
Some ways by which these individuals/groups manipulate the market include the following :- Pump and dump Schemes :
Here the manipulators suddenly makes the market looks like as if its going for a rise (this is the Pump) in order to use other investors as bait and once they fall for it, they dump for their gains while others take the loss. - spoofing :
Here the manipulators place an order and cancel it quickly before it's been executed in order to deceive other traders using the order book to make trade in regards to the false order while they make a more favourable order - wash trading :
This is also known as volume manipulation, here the manipulators simultaneously buy and sell the same coin to increase the trading volume.
How to identify Manipulators :
- Be cautious of social media hype and criticism because we have seen most times when they criticise bitcoin and in the end it do shame them while they hype some altcoins especially meme coins which turned out to scam or overhyped or nothing.
- High trading volume since they do try to increase the trading volume.
- Sudden drop or hike of price
- Don't trade with emotions and avoid FOMO (fear of missing out)
How to protect against Trading Manipulators :
- Include long-term/ Hodling mentality in your trading analysis
- Go for reputable exchanges only, since smaller exchanges may not have the capacity to fend off manipulators
- Do your own research
- Be cautious of where you get investment advice
- Don't panic buy or sell
Lastly, all these are helpful but are just some ways of protecting against trading manipulators and don't totally believe information gotten from Coinmarketcap especially in regards to trading volume because they most times fabricated.
What other ways can one identify and protect against trading manipulators?
I know SEC is among those fighting against these set of people and its among the reason bitcoin ETF as not been accepted but lately its seems more like SEC are fighting against Bitcoin and cryptocurrency and this as somehow brings FUD to investors and manipulators as seen this as an opportunity to manipulate the market with this can I say SEC as been instigating trading manipulation?
Trading Manipulations. How to Prevent Crypto Market Manipulation?What is Market Manipulation in Cryptocurrency?
