Market manipulation in cryptocurrency involves artificially influencing prices or trading volume to deceive investors.
Market manipulation in the crypto sphere, explained
In the cryptocurrency space, market manipulation refers to the deliberate use of different deceptive strategies to artificially inflate or deflate the price of cryptocurrencies.
One of the signs of market manipulation includes sudden, unusual price increases or decreases that have nothing to do with important news or trends.
Moreover, persistent anomalies in the market or opaque trading methods may indicate manipulative activity, raising doubts about the market’s integrity among investors and authorities. Also, pump-and-dump schemes are prevalent in the crypto sphere, where a group deliberately inflates the price of a cryptocurrency by disseminating false information to entice buyers, who subsequently sell their holdings at a profit.
Additionally, whale manipulation is a market manipulation technique used by large holders, or whales, to purposefully buy or sell huge sums of a cryptocurrency to manipulate its price. Moreover, spoofing — the practice of placing huge buy or sell orders and then canceling them before they are executed to simulate a false sense of market demand — aims to manipulate the crypto market.
Crypto markets are also impacted by insider trading, which is the practice of people making trades based on secret knowledge.
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What is market manipulation in cryptocurrency?