$NEIRO The behaviors of market manipulation by cryptocurrency traders mainly include the following:
Pump and Dump
- Pump: Traders buy a large amount of a certain cryptocurrency, causing the price to rise rapidly. This attracts more investors to follow suit and buy in, and then the traders sell at a high price. For example, traders may buy a large amount of Bitcoin in a short period, causing the price of Bitcoin to soar significantly within a few days, attracting market attention.
- Dump: Conversely, traders sell off a large amount of cryptocurrency, leading to a sharp price drop. During this process, some small investors holding the cryptocurrency may panic and sell at a low price, allowing traders to buy back at a low level.
Fake Trading
- Wash Trading: Traders conduct buy and sell operations between multiple accounts they control, creating the illusion of active trading. For example, using account A to buy at a high price while simultaneously selling the same amount of cryptocurrency from account B, thus making other investors in the market believe that the cryptocurrency is very popular and trending upwards, attracting them to enter the market.
- Volume Manipulation: Through programs or by manipulating trading bots, they create a huge trading volume. This makes investors mistakenly believe that the market liquidity is strong, thereby affecting their trading decisions.
Spreading False Information
- Using Media Channels: Traders spread false positive or negative news about a certain cryptocurrency through social media, industry forums, etc. For example, disseminating false news that a cryptocurrency is about to cooperate with a large company, raising the price before selling; or releasing false news about increased regulatory crackdowns to suppress prices before buying in at a low price.