Davide
@0xdavide
⚠️🤖Have you ever wondered how markets are manipulated? Here are some strategies that are used: ✦Spreading Fake News and Rumors: this is the most banal thing but it is very powerful especially if it is performed by influential people. ✦Bear Raid: coordinated investors spread negative news by opening a short and causing the price to collapse, subsequently "buy the dip". ✦Wash Trading: through many addresses, the same asset is bought and sold, simulating volumes and activity. ✦Spoofing: large purchase orders are placed at certain price thresholds to make it appear that there is strong interest in that asset. When other traders react to them, the orders are modified or canceled (changing the price action to their advantage). ✦Painting The Tape: in this case many small trades are placed to create the illusion of high activity. Even if these are insignificant trades, they can influence the perception of the market.
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Davide
@0xdavide
✦Pump and Dump: it concerns small tokens where the creators, through influencers, pump a shitcoin and then advertise it. Then they dump it (rug pull). ✦Front Running: the price is not manipulated in general but the attacker seeing pending orders (due to slippage) in an AMM tries to buy/sell that same asset by paying more gas fee. He buys at a lower price, decreasing the amount of tokens received by the user who had the pending transaction (his buy will further increase the price. Attacker, immediately sells for an instant profit). It is possible to exploit this technique by buying a crypto/stock on an exchange/broker knowing in advance that a large buy will make it go up.
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Davide
@0xdavide
✦Range Manipulation: the goal is to push the price in one direction, causing some traders to exit with losses. A consolidation cannot last forever and that after 5-6 touches of the upper or lower lines, the violation usually occurs. However, when the price reaches a breakout point but then retraces, it is considered manipulation. Once manipulation has occurred, it establishes a solid support or resistance level that affects the price reaction. ✦Fair Value Gap: these are market inefficiencies. Fair value gaps occur when buying or selling pressure causes significant price movements, creating gaps on price charts. As time passes, the price tends to move towards the FVG close (after a pump, the price retraces. So those who entered after the FVG formation close their positions).
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