Crypto was "over" many times:
- 2014: Mt. Gox collapse
- 2022: Luna collapse, FTX collapse
- 2024: Germany, Mt. Gox, more to come
But after these manipulations, the real bull run began.
🧵 How Market Makers Manipulate the Market and How Not to Fall for It
Many have heard about who the whales are and how they manipulate the market. But no one realizes how often this happens. They often set up news for their manipulations, and it has always been this way. Let me explain👇
🔍 Example: Recent news about Mt. Gox moving their $BTC. Many understand that this means imminent payouts, which will create pressure on the price, leading to large sales and a decline. And that's exactly what happened. Now whales can actively take positions.
But...
Fortunately, whale manipulations can be easily noticed. Here's their common pattern:
- Accumulation
- Pump
- ReAccumulation
- Pump
- Distribution
- Dump
- ReDistribution
- Dump
💡 9 Main Whale Manipulations:
1. Spoofing the Market
- Whales use fake orders to manipulate trader emotions. For example, a large buy wall creates bullish sentiment but then vanishes, confusing traders.
- Massive sell orders above the price scare traders. Use limit orders and avoid reacting to temporary walls.
2. Two-Sided Market
- Whales position large orders on both sides, driving prices up to sell or pressing them down while buying.
- It creates rallies or downturns, exploiting price fluctuations where retail traders, who can only trade in one direction, are overwhelmed by these price swings.
3. Wash Trading
- Whales employ wash trading to create fake volume and momentum, misleading buyers with inflated interest and liquidity.
- Check true liquidity through the bid/ask spread and order book activity rather than relying solely on volume metrics.
4. Closing the Jaws
- Whales strategically place large buy and sell orders at closing prices to sway the market.
- Descending buy walls and ascending sell orders push prices downward, trapping retail longs and favoring shorts.
5. Stop Runs and Flushes
- Whales push prices beyond key support or resistance levels to trigger stop orders, causing cascading moves.
- They then quickly reverse within the range, capturing stop liquidations and trapping traders.
6. Painting the Charts
- Manipulators form chart patterns by purchasing at resistance levels or selling during price bounces.
- Retail traders perceive patterns as signals, which guide market movements.
- This creates deceptive levels, leading chart-dependent traders astray.
7. Range
- Whales move prices to reduce entries, causing some traders to exit at a loss.
- Consolidation typically ends after 4-5 touches, breaking top or bottom lines.
- If the price hits a breaking point but reverses, it's likely manipulation.
8. Fair Value Gap (FVG)
- FVGs arise from aggressive buying or selling, leading to significant price movements and gaps on the chart.
- After an initial surge, prices often drop, benefiting major players and forcing latecomers to exit their positions.
9. Stop Loss Hunting
- Whales start a series of stop-loss activations by pinpointing groups of stops at key levels.
- They then push prices toward these levels, placing substantial buy or sell orders to activate the stops, causing swift price changes.
🔑 Tips to Avoid Whale Manipulations:
- Don't make any impulse investments.
- Check true liquidity through the bid/ask spread/volume.
- Wait for price movement confirmation.
- Avoid setting stop-losses at key levels.
- Don't invest in low-volume trades.