Manipulation of the market is about creating an unnatural impact on the price of a market asset. It can also affect the behavior of a market. To get a huge profit this illusion is created by a single person or a group of individuals.
In the year 2018, the department of justice in the US has investigated to cross-check the manipulation that has disturbed the bitcoin market. As you are aware of the fact that crypto is really new in the market and there are so many people who are looking to exploit its flaws.
Manipulating The Market Vs Manipulating The Currency
Do not get confused between market manipulation and cryptocurrency manipulation. The currency manipulation is only done by the higher authorities like banks and the government itself. Moreover, it is completely legal to manipulate the currency but other countries have the right to challenge it.
4 Effective Strategies To Manipulate The Market
- Pumping And Dumping
It is one of the best ways to put an impact on the crypto market. In this, some individuals will work together as a group to affect the value of the coin in an unnatural manner. This strategy usually works on the coins which are available in the low market with limited exchanges.
- Whale Wall Bluffing
So many people are bluffing others in the cryptocurrency market to manipulate the market. In this strategy, a huge order will be placed by a whale to show a fake sell and purchase entry in the order books. This process is also known as spoofing.
- Clean Trading
It is quite similar to spoofing because false information will be presented in the market during both cases. In this, an individual person or a group of people will buy and sell the same currency, again and again, to create a fluctuation in the market.
- End Hunting
The fake buyers will put the cryptocurrency at a very low level and it will force the audience to set end- loss orders.
What Are The Market Manipulation Effects On Cryptocurrency?
A new user will find the cryptocurrency market unsafe and less reliable because of market manipulation. When the volume of coins is less then it will be easy to manipulate the market. So many times these big whales do not even buy or sell the asset. The only thing they do is a tweet to affect the market in a bad manner. It is very common to see some drastic changes in crypto coins.
Best Ways To Deal With The Manipulation Of Market
It is quite difficult to track the manipulation of the crypto market. You need to do thorough research before investing your money in any kind of assets. These are some of the best ways that might help you in dealing with the manipulation of the crypto market.
- Always cross-check with the help of different resources.
- Longer-term contracts vs. perpetual futures
- Keep an eye on the recent prices.
- Expand your portfolio.
- Dollar-cost average (DCA) with recurring buy
