The market maker's manipulation methods and corresponding trading strategies of the strong market maker (1)
The original text comes from Twitter @Michael_Liu93. The content in this article is a product of the editing and may deviate from the original intention of the author.
Characteristics of strong market maker tokens:
1. The token has little attention and generally no one hoards spot tokens.
The chips are extremely concentrated. One address or several related addresses occupy most of the total chips (60%~70%, or 80%~90% of the total circulation).
l Holding address query tools: Arkham, OKlink, token corresponding chain block browser
l Address association tool query: Bubblemaps
2. Only spot tokens are available in large exchanges with good liquidity.
This type of token usually has trading pairs in Korean exchanges with spot liquidity and user sentiment to chase the rise (mainly upbit and bithumb, and some in binance), and is paired with several exchanges with good liquidity (mainly binance and bybit combination). Most of them only have spot tokens and no contracts. Usually, a token with only spot tokens starts to rise and meets several other characteristics. Then Binance announced the launch of the contract, which means that the dealer is ready to harvest.
3. The speed of pulling up and smashing the market is very fast
The market will rise tenfold within a month, the main rising wave will not exceed one week, and then smash 80% within one week, and sell it after the harvest or abandon it directly.
General means of dealer operation
1. Build long positions at the bottom
Some dealers will not place long orders, but take the top short-selling profits. Only earn part of the profit of long orders through spot
2. Small funds pull up the market to attract retail investors to enter
Use small funds to pull up the spot and drive the contract up. Attract retail investors who trade short-term to short in order to earn band profits. Among them, the funding rate reached a negative extreme for the first time in this operation, mainly because a large number of retail investors and quantitative institutions were shorting
3. Induce shorts and continue to pull up
The dealer continues to use small funds to quickly leverage the spot to rise, and continue to drive the contract up. The rise of contracts leads to the liquidation of retail investors, and the forced liquidation of retail investors will further lead to the rise of contract prices
4. Open short positions at the top and smash the market. After all the short positions are blown up, the dealer starts to close long positions, then establish short positions at the top, and finally smash the market to complete the harvest. Among them, the second time the funding rate reached a negative extreme value, the main reason was that the dealer opened short positions
Due to space limitations, the rest will be seen in the next article.
