In recent years, MEME coins have become the object of pursuit by many investors due to their high-risk and high-return characteristics. However, along with the crazy market with 10x and 100x returns, there is also the risk of manipulation by powerful market makers. How to identify these potential risks and avoid becoming a "leek" is a skill that every investor must master. This article will analyze how to identify MEME coins manipulated by powerful market makers by observing market behavior.
1. Abnormal price stability
In the volatile cryptocurrency market, wild price swings are the norm, but tokens controlled by powerful market makers may exhibit abnormal price stability. This phenomenon is usually caused by high-frequency trading algorithms, which use frequent buying and selling operations to keep prices within a narrow range and avoid large fluctuations.
2. Sustained high trading volume
If the trading volume of a MEME coin remains high for a long time without obvious fluctuations, it may indicate that market makers are artificially maintaining trading volume. Through wash trading (i.e. buying and selling operations by the same entity), market makers can create the illusion of market activity and attract other investors to enter the market.
3. Deep order book and liquidity maintenance
Tokens controlled by strong market makers usually show a large number of buy and sell orders close to the current price on the order book, creating the illusion of a deep market. The existence of such liquidity depth prevents small transactions from having a large impact on the price, making the market look stable and healthy.
4. Price movements go against market trends
When the overall market is falling, if the price of a MEME coin rises against the trend and there is no other fundamental or news support, this may be a sign of manipulation. Market makers may mislead other traders in the market about the supply and demand relationship of tokens by using deceptive layered orders or other strategies.
5. Abnormal trading patterns
Controlled tokens often exhibit specific trading patterns. For example, a lack of pullbacks after a steady climb in price, or stability after a sudden surge, could be the result of human intervention.
6. Whales are active
Market makers and large holders (also known as “whales”) play a key role in strong market manipulation. If a large amount of tokens flow on a token’s exchange, especially if these flows coincide with price fluctuations or stability, it often means that there are big players behind the scenes controlling the market.
7. Beware of signals before a crash
- Declining trading volumes: If trading volumes suddenly drop significantly, it could mean that market makers are pulling out, signaling a drying up of liquidity that could trigger a price drop.
- Thinning order books: A decrease in buy orders or a sudden shallowing of the order book may also be a sign that market makers are preparing to exit the market.
- Large sell orders appear: When large low-price sell orders suddenly appear in the market, especially sell orders below the current price, this is often a signal that big players are preparing to exit the market.
- Price pullback: If a token price suddenly falls below its long-term trading range without clear fundamental support, it may be a signal that the manipulation is over.
8. High financing rates in the futures market
For MEME coins with futures trading, high funding rates usually indicate that the market is over-leveraged. When funding rates begin to drop rapidly, it may mean that traders are closing their positions and market price adjustments are imminent.
9. Social media and changes in community sentiment
Community sentiment is a key indicator of market direction. When community sentiment suddenly turns from positive to negative, or influencers start to reduce their promotion of a project, it may mean that market makers are controlling market sentiment and are preparing to withdraw.
10. Abnormal withdrawal patterns and external factors
If withdrawals from exchange wallets suddenly increase, especially before a market drop, this may mean that big players or market makers have begun to take profits. In addition, the outbreak of regulatory and legal issues may also be external factors that lead to the plunge.
Summarize
Facing the risky MEME coin market, investors need to have sufficient self-cultivation and the ability to identify risks. By observing market behaviors such as price, trading volume, and order book depth, we can identify signs of manipulation by strong market makers. Although the crypto market is full of temptations, staying calm, investing cautiously, and avoiding overly stable or overly active projects are the best ways for leeks to protect themselves.
The feast of the market will eventually end, and speculators often realize the problem too late. Only by having the ability to make independent analyses and avoiding the manipulation of powerful market makers can you truly control your own wealth in the future.