In my review last Sunday I mentioned possible market manipulation after Grayscale Unlocking and the bad news is that it's live in the cinema right now. I badly wanted to be wrong but I wasn't, I am afraid.
Here is that article: https://kaalama.org/read-blog/28182
We all know smart money is a real game player but this level of manipulation only crushes some of the hardcore bitcoin and crypto fans. Yet, one may say that it's good to shake out weak hands for the betterment of industry and I am afraid I tend to agree with that argument.
DO NOT GET MARRIED TO CRYPTO UNLESS YOU ARE FULLY COMMITTED!
Anyway, how do we spot such manipulations, especially in the live market right now? There are many types of manipulations and therefore many ways to spot them. Yet, let's talk about what I spotted today. I have discussed it before as well, but I have to talk about it again today.
The above is the 4 hour time frame taken a few minutes ago. Notice the shown volume bars and lengths of the corresponding red candles.
My interpretation is that a big player short sells out of the blue creating a domino effect where some stop losses are triggered due to the sudden price drop fulling the artificially created downwards momentum.
Then, this whole momentum triggers liquidations of some of the reckless trades who were on high level leveraged positions. We cannot blame them, but at least a properly set stop loss could have minimized this domino effect and saved a part of the day.
The whole thing causes large volume bars, long red candles and bearish price action in short term time frames. If you zoom in to 1 hour or 15 minute time frames, you will see this scenario more and more clearly. However, such a manipulation that is visible in a 4 hour time frame cannot be underestimated and could have a serious effect on the market for even weeks if not days.
If we want to see more of such actions, we will have to keep an eye on 15 minute time frames for hours and enjoy the show.
This is only one method of manipulation and let's talk about more as we spot such in the future.
Finally, I wouldn't trade on such bad days but just hodl till they finish their part and walk away. If you are really smart and have time to spare, you can play the game with the smart money, which is a game at the top of the high risk high reward scale.
More insight to the Crypto Market?