Lets talk manipulation
Good morning/evening
Ok, let's start with the fact that manipulation of markets has been around forever and always will be, but what sort of manipulation do we find in the crypto market?
Wash trading
Exchanges or bots trade with themselves over and over, generating 'volume'. The goal is simple, make a ghost town of a blockchain look like it has massive trading volume, new investors show up, see impressive trading activity, and assume the project is alive and buzzing.
The wild part is how effective it still is. We can all get fooled by inflated volume, thinking it signals real demand or strong liquidity. Meanwhile, the wash traders are pumping out fake metrics, boosting rankings on data sites, and creating the illusion that a token has a thriving ecosystem.
https://www.investopedia.com/
Pump and dumps
This sort of thing is not just crypto related but has been taken to extreme levels in crypto. You have all seen it, especially in meme coins. The chart shoots up like a vertical ski slope, retail investors stumble in late 'bro it’s going to 100x and then boom the floor disappears faster than your portfolio during a flash crash. The organizers dump their bags, the coin tanks, and you’re left staring at a chart that looks like a cliff dive. It is so common that even a 14 year old kid did it!
https://www.tradingview.com/
Spoofing
This is actually a manipulation tactic where traders place massive buy or sell orders with zero intention of filling them. The goal? Fake the market into thinking demand or supply is stronger than it really is. So you see a massive wall of buy orders and think, 'Oh wow, strong support, let me enter long,' not realizing that wall is about as real as a Web3 metaverse nightclub. Spoofers cancel the orders at the last second, the price moves the opposite direction, and you’re left feeling like you just got pickpocketed in slow motion.
Good old insider trading
I will just say Trump family, but they are by no means the first, hell it would be hard not using insider information to get your 3rd cousin once removed to trade for you if you had such information. Devs know when changes are coming, whales know when liquidity is being moved. Someone buys huge bags five minutes before an announcement, and suddenly they look like they made the trade of the century!
Influencers
You know, the ones who are supposed to declare they are being paid to shill a project but rarely do! I am embarrassed to say that back in the early days I fell for this.....lol I think the token was called Sphere, I probably wrote about it, yep all my wins and losses are documented. I did actually come out of that with a small profit but more through luck than judgement and even after the 25% exit tax! I learned a lesson, even now I am in a patreon group BUT I know everyone is someones exit liquidity! So as much as I may read and listen, I do not blindly follow. YouTube, X, Telegram and others are full of people shilling this that or the other and sometimes it is difficult to not fall for the promise of 100X gains on some s**t coin when it looks like you are the only one not in it!
Project manipulation
Yes, I had a real taste of this with a small DePin project called DeFli, oh my this one was terrible, I joined but once I started looking into it there were so many red flags, the glossy website pictures were fake, if you so much as asked a question in Discord, you were banned, It was going to be listed here there and everywhere, dates kept changing, even the tokens changed a few times and people were paying for hardware that never arrived. I escaped from this one with a small profit and yes I wrote about this one too. I pleaded with a friend from the Helium days who was a Mod in discord to sell his tokens, but he ended up with nothing to show for his time and effort.
A few more things to throw in the mix are adjusted vested token date changes as well as a new withdrawal tax added or even a freeze on withdrawals all together!
Whitepapers promise decentralization, community governance, and transparency, and then the team edits the tokenomics after launch like nobody’s watching. Again after 3 years of waiting my WXM tokens went from what was supposed to be an airdrop to a vested drip feed over a year.
Whales
Now the whales can make a token price, especially low value tokens move in any direction especially if they hold a huge percentage of said token , a single whale market buys a chunk of a low cap and suddenly everyone thinks the bull run is back. They stir up excitement, let retail pile in, then slowly bleed their position while retail thinks the dip is just a 'healthy retest.' By the time you realize it’s not a retest but a farewell tour, the whale is already in a Lambo showroom!
Market makers
After 10/10 there were a lot of theories about the market makers and Binance. Liquidity thinned out, spreads widened to chasms at weird times. Some tokens even went to 0 and so many people got liquidated. Was it the oracle failure? Was it Binance? Whether it was risk controls, internal market-making adjustments, or Binance simply turning the knobs behind the scenes, the effect was the same, people were wiped out and some just plain gave up. Was it an Oracle failure? Several on chain protocols relying on Binance driven price feeds reported bizarre mismatches, delayed data, or outright desyncs. Well perhaps we will never know the real reason but either way, it wasn't good. You only had to look on Reddit or X to see how people thought this had happened and why.
Other exchange level manipulation is that they can front run orders, see liquidity before anyone else, and have the power to freeze withdrawals just as a coin collapses. 'Due to high network congestion,' they say.
So what is the answer, do we just give up? In my opinion no, we just have to acknowledge that manipulation is part of the ride. It does not mean you can’t win, it just means you have to be cautious and be aware. Crypto is a rollercoaster, yes, but you can survive the madness with your sanity and portfolio intact, nothing in life is easy. What are your thoughts?
As always thank you for reading and please feel free to comment.
