Why using highly leveraged debt to purchase a quickly increasing asset is a bad decision. And under what circumstances do most new consumers lose money due to Whales?
Many bitcoin users think that large investors, or “Whales,” are responsible. For their personal financial gain, they manipulate bitcoin exchanges through technological means and media hype. According to popular belief, Whales profit from such activities by causing many smaller investors to lose money.
We learned what tactics Whales employ to control prices in cryptocurrency marketplaces from specialists in crypto garage. And how to avoid getting caught in a trap they have set.
Our experts tell us what manipulation schemes Whales use
The same techniques are employed by whales to influence asset prices. Most renowned investment funds and banks also operate on the stock market. The psychological aspects of trading and speculating on exchanges are always important. It is sufficient to spread rumors regarding the drawbacks of one crypto platform or another. As the value of their tokens starts to decrease. Additionally, our Crypto Garage specialists provide an example of Elon Musk’s tweets. Following which, some “meme” cryptocurrencies saw a sharp increase in value.
Selling or buying large quantities of assets is another well-liked manipulation technique. Selling may cause the value of BTC and other currencies to decrease. might serve as a warning that a decline in price is imminent. Insider knowledge could be the cause of an institutional investor making a sizable asset buy. and project a sharp increase in coin prices.
A number of options exist for price manipulation. Whales can engineer short-term price shifts thanks to their knowledge of exchanges. After achieving the first significant profit on margin accounts, customers of various exchanges claim (futures contracts). Opening “sell stop” and “purchase stop” orders is a challenge for them. which switches to other sorts of orders automatically and without the trader’s knowledge. When BTC quotes were roughly balanced around $20,000, for instance. Customers of FTX started to gripe about not being able to place buy orders below that point. since “the range computed by this platform” does not include their pricing.
another indirect sales-free means of manipulation. establish “walls” between purchasing and selling. By establishing large volume sales at lower market ceilings. It compels individuals looking to sell to swiftly drop their asking prices. Following that, the price drops and the “wall” gets increasingly smaller. In this technique, Whale isn’t even actively participating in any deals. However, he incites other dealers to carry out their own trades under considerably harsher circumstances.
How to avoid falling into Whale’s trap and avoiding financial loss
There are a ton of bull and bear traps designed deliberately to rob novice investors of their money. As a result, novice investors are encouraged to make long-term investments.
Therefore, we shouldn’t pay attention to what big investors are doing. You must imitate their behavior, but you shouldn’t attempt to do everything they do. Thus, there is a reduced possibility that Whales may use you for their own ends. and pressuring you to purchase or sell. Make your own choices without considering Elon Musk’s tweets.
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