A 60% plunge in one day: Uncovering the secret trading techniques of the AUCTION whale

Written by: Fairy, ChainCatcher

A hidden and efficient trading game was staged over the weekend.

In just a few weeks, an unknown entity has acquired more than 20% of the total supply of AUCTION, driving the transaction volume to soar, the holding volume to grow, and the CVD to continue to rise. Everything seems to be a strong market dominated by bulls. However, behind this, the "banker" is accurately shipping without making a sound.

The token price has gone out of the "Christmas tree" market, seemingly climbing steadily, but in fact it is a hidden danger. What kind of trading layout is this? How can the "banker" complete large-scale shipments in a situation where "it seems that the bulls are dominant"? This article will deeply analyze the truth of this trading layout.

AUCTION market movement: whale trading tracks emerge

AUCTION is the governance token of Bounce Brand, a decentralized auction platform that integrates liquidity mining, decentralized governance and staking mechanisms.  

Last night, Bounce Brand issued a statement to clarify that the team did not participate in AUCTION price manipulation and disclosed a series of market movements:

In the past few weeks, an unknown entity has accumulated more than 20% of the total supply of AUCTION.

AUCTION trading volume has risen sharply on major exchanges, and the AUCTION futures trading pair on Binance has become the third largest trading pair after BTC and ETH. The spot trading volume of AUCTION on Upbit has surpassed BTC for many consecutive days.

Upbit's AUCTION trading price has shown a significant premium, and a large amount of AUCTION has been extracted from mainstream exchanges for arbitrage trading.

In addition, market liquidity has also been significantly unbalanced, showing a series of unhealthy conditions:

Binance hot wallet holdings have dropped sharply, and currently only less than 10% of the total supply of AUCTION remains.

The annualized lending rate exceeds 80%, and the funding rate has remained at -2% for multiple cycles.

Major exchanges have adjusted the position limits and risk control measures for AUCTION perpetual contracts.

Based on the monitoring data of Ember, we have sorted out the recent key operation trajectories and price changes of AUCTION whales:

From the perspective of a series of fund mobilizations by whales and market anomalies, the price trend of AUCTION is not simply driven by funds, but there is a more complex trading layout behind it.

Hidden delivery technique: "Passive sell order" trading strategy

During the plunge of AUCTION, market data showed a seemingly contradictory signal: CVD (cumulative volume increment) continued to rise, funding rates continued to rise, and positions were also increasing. According to conventional logic, when CVD rises and the position increases, it usually means that there are a large number of active buy orders pouring into the market, and the price should rise. However, the price of AUCTION has been falling all the way, showing an obvious market divergence phenomenon.

According to the analysis of crypto KOL Biupa-TZC, AUCTION's "dealer" adopted an extremely hidden "passive sell order" delivery strategy, completing large-scale delivery in a market that seems to be dominated by bulls.

1. Hang a huge passive sell order

The "dealer" constantly hangs a super-large passive sell order near the market price, allowing active buy orders to hit and trade.

Since the spot is mainly controlled by the "dealer", there are almost no active sell orders in the market. CVD is calculated by subtracting active sell orders from active buy orders. In the absence of active sell orders, CVD continues to rise, but prices are always under pressure.

2. Create the illusion of "firm prices"

"Market makers" avoid actively smashing the market, but make it look like there are only buy orders in the market, giving investors the illusion that the market is rising.

Since CVD has been rising, the position volume is also increasing, and retail investors mistakenly believe that funds are actively pouring in, so they may actively go long or buy at the bottom.

3. Gradually absorb market buying orders and complete shipments

"Market makers" eat up the active buying orders one by one by constantly placing new passive sell orders.

Whenever active buying hits passive selling orders, there is a short-term liquidity vacuum in the market, and the "banker" adjusts the selling orders downward again, causing the price to gradually fall.

Due to the large trading volume, these selling orders are not just suppressing the price, but are actually selling, which eventually leads to a sharp drop in the price of AUCTION.

The trading game is over, and the market alarm bells are ringing

Behind the sharp rise and fall of AUCTION is the carefully planned capital allocation and trading layout of the "banker". Although Bounce Brand has provided liquidity support on multiple exchanges and locked up about 1.5 million AUCTION to stabilize market liquidity, this incident still exposes the hidden risks and complexities in the crypto market.

For ordinary investors, this is a profound lesson: in the face of highly volatile assets, blind signal trading will only become a bargaining chip for "bankers". Only by staying vigilant and deeply analyzing market dynamics can you remain invincible in the ever-changing trading market.