Author: Revc, Golden Finance
Due to the unrestrained issuance of air coins by VCs in the crypto market, investors can only hide in the "last crypto wealth paradise" - the MEME market. However, some entities in the MEME market have recently been targeted by the FBI for sting operations. The US SEC and other government departments have jointly taken action to investigate crypto companies and market makers suspected of market manipulation. Relevant companies and individuals have been charged and have pleaded guilty. In the short term, the market has been cast into a shadow again. How should investors learn lessons from this and identify strong MEME tokens?
The FBI successfully lured and obtained evidence of participation from market makers such as Gotbit, ZM Quant, CLS Global and MyTrade MM by creating a fake cryptocurrency project NexFundAI. These market makers were accused of participating in market manipulation and fraud.The crypto token companies involved include Saitama and Robo Inu, which raised token prices through false propaganda and wash trading and sold them at high prices for profit. In addition, the U.S. Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) and the Department of Justice (DOJ) jointly took action to file lawsuits against these companies and individuals, aiming to combat illegal activities in the crypto market through legal means and recover illegal gains. This incident not only reveals fraud and manipulation in the crypto market, but also demonstrates the determination and collaborative effectiveness of regulators in combating such activities.
To determine whether tokens such as MEME are manipulated or controlled by strong market makers, you need to look for several obvious signs.
AbnormalPrice stability: Tokens controlled by strong market makers often exhibit unnatural price stability, especially in turbulent markets where most cryptocurrencies experience large fluctuations. This may be due to high-frequency trading algorithms that keep prices within a narrow range.
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Price Movements Opposite to Market Trends: If the price of a MEME token moves in the opposite direction of the broader market trend for no apparent reason, this could indicate manipulation. Market makers may use strategies such as layering or spoofing to mislead other traders about the supply and demand of a token.
Unusual Trading Patterns: Look for patterns where prices climb steadily without pullbacks or where sharp increases are immediately followed by stabilization, which could be artificial.
Frequent Whale Activity: Large trades often involving millions of tokens moving in and out of exchanges could indicate whale (large holder) or market maker activity, especially if these trades coincide with price stabilization or manipulation.
Signals before a crash:
Declining volume:If volume begins to drop significantly, it may indicate that market makers are exiting, which may foreshadow lower prices as liquidity dries up.
Thinning order books:A sudden decrease in order book depth, especially on the buy side, may indicate that support levels are being withdrawn, foreshadowing an impending price drop.
Large sell ordersappear:If large sell orders suddenly appear, especially those below the current market price, this may be a signal that big players are preparing to exit.
Price Pullbacks:If a stablecoin begins to break out of its trading range without fundamental news to support it, this could be the start of a controlled or uncontrolled sell-off.
High Funding Rates for Futures:For tokens with futures markets, high funding rates can indicate that positions are overleveraged. If these rates begin to fall rapidly, this could signal a correction as traders close out their positions to avoid high costs.
Social Media and Community Sentiment:A clear shift in community sentimentorthe sudden silence or negativity of influencers can sometimes precede a price drop.Market makers may also use social media to manipulate sentiment.
Unusual Withdrawal Patterns:If withdrawals from exchange wallets to cold wallets or other wallets suddenly increase, this could indicate that holders or market makers are taking profits before a drop.
Regulatory or legal news:External factors caused the plunge, such as regulatory crackdowns or legal issues affecting the token ecosystem.
Technical indicators:Indicators such as RSI (Relative Strength Index) show overbought conditions, or divergences between price and momentum indicators, which may indicate that a reversal is coming.
This law enforcement incident once again lifted the fig leaf of the crypto market. Every batch of leeks will encounter their own "Luna and Three Arrows Capital". At present, speculators are immersed in this MEME wealth feast. Even if they are aware of the problem, they always believe that they are the lucky ones who are trying to gain probability.
The above situation also reflects the helpless side of the current crypto market. Judging from the performance of the US economy and inflation data, the crypto market may not have the huge liquidity in 2021 in the short term. Returning to the asset value of the crypto market itself, the idea of relying on the macro-easing cycle is no longer realistic. In a relatively sluggish period, the entire crypto industry should still focus on compressing the core, forging the vitality of the project, and cultivating endogenous motivation, and get rid of the erosion of capital before it can usher in the dawn.
For investors, they should master more analytical skills and be cautious about every investment.
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