Cryptocurrency appreciation is not always a natural phenomenon. Cryptomarket attracts speculators who have the opportunity to influence it and actively use it. Ordinary users could suffer of this and they often do not realize that they have fallen into a trap and explain their failures as a bad luck. What situations do indicate the manipulation of the cryptocurrency market? How to recognize and protect yourself from loss? We will describe in this article!
Manipulative increase in the cost of cryptocurrency is an artificial effect on its course. The purpose of manipulators is to buy cryptocurrency at the lowest possible price and sale at the highest possible. The difference between ordinary speculators and manipulators is that speculators predict asset prices, while the manipulators set them.
Manipulators, as a rule, are people and organizations that have significant financial resources. For example, investment funds, company owners, single major players and so on. Less often – people who have good opportunities in the field of information dissemination.
Manipulative price increases are rarely observed in a naturally growing market, especially when the price has exceeded average values. The purpose of manipulators is to buy an asset as cheaply as possible, and therefore they appear
More often, manipulators are invested in low-value assets. Other things being equal, the choice will fall more on a currency that costs $ 10, than on a currency that costs $ 100.
The reason for this is simple. Manipulators give the first impetus, but further increase in the price of cryptocurrency is provided by unsuspecting users. They see a growing asset and buy it up, creating demand and attracting new investors. Thus, one of the goals of manipulators is to attract new users and they are more willing to go to the market of cheap currencies, since
By the way, newcomers to manipulators are worth their weight in gold, because they are “unsuspecting” users – unlike experienced investors.
There are other, less common ways of market manipulation. Among them is the creation of a positive news background, when the manipulator launches attractive rumors, “quotes” well-known investors, creates fake “official” currency pages and so on.
The campaign takes from a few weeks to 2-3 months and for the implementation of the strategy requires a good knowledge of the principles of PR. Often the manipulator itself is related to the team or the media.
The manipulators after buying cryptocurrencies repeat the cycle , since they need to sell the purchased one, in the first case. Because of this, they are trying to prevent the mass withdrawal of market participants and quickly begin to raise an asset.
If the manipulator does not intend to repeat the cycle, he doesn’t care what happens to the cryptocurrency, how much it collapses and whether it can recover. In this point, no one is trying to keep market participants and there is a massive departure, provoking an even stronger fall in the currency.
The currency is not always restored, the little-known and recently appeared coins suffer especially. Larger and more popular currencies reach their average level in a few months.
It is likely that the asset will be able to reach the maximum price in a year after another, because the psychological mark has been broken through and the market will strive for it. However, the cryptocurrency will not be able to rise up to the mark for a couple of months after the collapse. It is unnatural and contrary to all laws of the market.
As a result, investors who came to the market during a manipulative price increase and former market participants who did not notice the manipulations are losing money. To protect yourself from loss and to recognize the manipulation on time, it is worth
Finally, the main rule in the detection of manipulation to trade in the market, which is manipulated, only with confidence in their abilities. If there is no clear understanding of how to beat the manipulator, then it is better to sell the assets in time and watch what is happening from the outside.