Look
http://www.dailycoinnews.com/2014/11/01/bots-and-conspiracy-do-they-really-exist/If you were trading on Bittrex lately then you should already know about the sudden declines of the price that occur periodically. Many speculations have been made about a conspiracy that runs bots on online exchanges and spread fud in the bitcointalk forums to accumulate more coins by driving the price down. Others say this is completely natural. Lucky for all of us some people watch closely the charts so they can give a proper explanation to the whole story. James who is also known as jl777 in the Bitcoin community is trying to figure it out and in the meantime updates the BitcoinDark community with observations that he comes across. The next part of this article is some of the observations that James shared with the rest of the BitcoinDark community.
“There is a bot that is ACTIVELY manipulating the price.
quite effectively too.
If you look at the price on bitcoinwisdom, you will see that there is a pretty even spread of asks all bunched together, within 10 satoshis!
About 5 BTC. This makes a barrier and also crowds out the orderbook so you cant see what is really going on. It is also chaging things several times per second to create the impression of a lot of activity. What it does is pushes the price down by clearing out small bids and making lower and lower asks.
Earlier there was about 10 BTC in 30+ orders around .0049 and 3 BTC between that and .008
So, there is no investor panic going on. It is just one guy running a bot. And he is doing this on many different coins.
His game is this.
Have the bot on bittrex and cryptsy, but run just one of them at a time. Create some FUD push the price down on one (easier to create fear, especially in a bear market) then as people get convinced everybody is selling, they start selling. Remember this is just happening on one market. So soon the sell price on one exchange is lower than the buy price on the other exchange where the bot is idle. Guaranteed profits! Then the bots switch.
so first one exchange price is pushed down. arbitraged, then the other. Doing this it creates these mysterious price declines as we are making such good progress. All the way down to .005! But there was really very little for sale below .008 as this operation is being done on dozens of coins, so only so much budget per coin.
Now this bot is not caring about price at all. Whatever the price is, it just picks the exchange with the lower price, pushes is down until it can arbitrage. The arbitraging evens the price out and then the pushing starts again. Now this bot stays away from even a 1 BTC wall from what I have seen and certainly anything larger it stays about 10% away from. However if there is no big wall, it happily startings pushing the price down, even filling some orders if they are small enough.
These bots are probably on autopilot, so that means a clever person will be able to trick the bot.
tl:dr now that whale dumper is gone, recent price decline is caused by one guy’s bots and a few BTC wall will keep it at bay. Maybe we can come up with a way to beat it and win 1 BTC per day from it. then it will certainly go away
James”
