Tactics to Manipulate the Price of Cryptocurrency

Market manipulation has persisted for millennia as there have been marketable assets, and virtual currencies are no different. The cryptocurrency market is also in its infancy, with few laws in place, making it subject to market manipulations that are difficult to perpetrate in mature markets. Let’s look at some of the most frequent Tactics to Manipulate the Price of Cryptocurrency.

market manipulations

The Greatest Trick in the Book: Pump and Dump

While talking about Cryptocurrency market manipulation techniques, Pumps and dumps are a systematic way for whales to manipulate the bitcoin market. This strategy is carried out by a whale progressively acquiring a particular currency over multiple days, leading to substantial price gains on trading charts. Because new investors don’t want to lose out on any price increases, these price hikes will bring a lot of fresh money to the coin.

The infusion of new funds drives the coin’s value further higher, and once the whale is comfortable with their winnings, they will proceed to dump. In most cases, the dumping will happen in waves. As a result, the whale will dump immediately, and investors will believe it is a one-time dip and ‘buy the bottom.’ This strategy works exceptionally well with low-market-cap currencies since whales can compare the cost of these coins more quickly due to the absence of cash flow.

Pumping a digital asset involves purchasing massive volumes and then selling it at the peak of the resultant price surge. Anyone with the financial means to buy giant coins can do so. Some criminals will utilise the classic pump-and-dump scheme with flogging, counterfeiting, and wash gambling. Pump-and-dumpers sometimes form P&D organisations to share their resources for greater efficiency. Despite these Crypto Price Manipulation Patterns, making money with them is difficult. It works well with well-coordinated institutions like exchanges.