<p>This is a standard scheme for stocks, and it of course works for crypto-currency as well. It is considered unfair and therefore not allowed in the stock markets.</p>

<p>Crypto-Currencies are mostly unregulated, so it is legal to do.<br>
Feel free to join and do it too.</p>

CC BY-SA 4.0
2019-01-12T01:55:34.110Z
so you are saying that strategy works? it does not make sense,because is so simple that as you have said anybody with less $1M could do it. Why the big investors will fight in stock market then instead of just using this strategy in crypto? To me is obvious there is a problem with the strategy but I cannot understand what it is
Enrique
CC BY-SA 4.0
2019-01-12T04:43:51.867Z
It is illegal in the stockmarket. The regulator watch for it, and they'll come after you if you try it.
Aganju
CC BY-SA 4.0
2019-01-14T22:31:34.310Z
I know, what I'm saying is that why the big investors are trading in stock market if they have the chance to trade so easily manipulating the crypto market?
Enrique
CC BY-SA 4.0
2019-01-12T01:21:44.510Z
2019-01-12T01:21:44.510Z
Aganju
<p>Turns out that this was illegal for BitMex as well.</p>
<p>See their federal indictment: <a href="https://www.justice.gov/usao-sdny/pr/founders-and-executives-shore-cryptocurrency-derivatives-exchange-charged-violation" rel="nofollow noreferrer">https://www.justice.gov/usao-sdny/pr/founders-and-executives-shore-cryptocurrency-derivatives-exchange-charged-violation</a></p>
<p><a href="https://i.sstatic.net/0OWjJ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/0OWjJ.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2020-12-18T12:19:17.980Z
What is the relation with this topic? the problem there was with the anti-money laundering policies, not market manipulation
Enrique
CC BY-SA 4.0
2020-12-18T07:12:38.863Z
2020-12-18T07:12:38.863Z
librehash
<p>This is a graphic from yesterday (BitMEX:BTC, 1minute candles):<br>
<a href="https://i.sstatic.net/xJPYI.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/xJPYI.jpg" alt="enter image description here"></a></p>

<p>A price drop from $4000 to $3730 in 7 minutes<br>
Volume in those 7min was $140M    </p>

<p>Is possible that something like this happened (numbers are just an estimate to make it easier to understand the strategy)?:    </p>

<p>1) Half of that volume was a market sell (short) from one person (whale), but with 100X leverage => one person shorting $700K<br>
2) That short make the price drop from $4K to $3900<br>
3) Average entry for the whale short is then $3950<br>
4) That drop fired a lot of sell stop losses orders (by the other $70M)<br>
5) Those stop losses make the price drop to $3800<br>
6) The whale is in profit (short entry $3950, current price $3730)<br>
7) The whale starts to close the short position, but slowly, to avoid moving the price, average close = $3850<br>
8) The whale earns 2.5% (3950/3850) of $70M = $1.7M in just a few hours?<br>
it started with $700K and now has $2.4M!? and the worst part is that it can do it again and again?    </p>

<p>Even if the numbers are not correct, is possible for a whale to do something like that and not only move the market but also take profit on that movement, without any risk?     </p>

<p>I think this should not be possible, because is too easy. But I cannot understand what is stopping a strategy like that to actually work.    </p>

<p><strong>Can somebody help me to understand what is the problem with that strategy?</strong>   </p>

<p>EDIT: I can see a downvote and no comment, please if you are going to downvote at least explain why so I can learn to ask better or edit the question.</p>

CC BY-SA 4.0
2019-01-12T14:51:13.690Z
There are some close votes citing "Questions on current or future market values, energy costs or service provider availability are off-topic as the answers are changing too frequently to be useful to others.". This question is not about current market values, it's about a mechanism being used to manipulate the market explained with help of a recent example.
Murch
<trading><exchange-rate>
Is this one of the strategies used by whales to manipulate BTC? (real example)
Enrique
# Is this one of the strategies used by whales to manipulate BTC? (real example)

(Asked by: username_0 on 2019-01-11)

This is a graphic from yesterday (BitMEX:BTC, 1minute candles):  
[![enter image description here](https://i.sstatic.net/xJPYI.jpg)](https://i.sstatic.net/xJPYI.jpg)

A price drop from $4000 to $3730 in 7 minutes  
Volume in those 7min was $140M

Is possible that something like this happened (numbers are just an estimate to make it easier to understand the strategy)?:

1) Half of that volume was a market sell (short) from one person (whale), but with 100X leverage => one person shorting $700K  
2) That short make the price drop from $4K to $3900  
3) Average entry for the whale short is then $3950  
4) That drop fired a lot of sell stop losses orders (by the other $70M)  
5) Those stop losses make the price drop to $3800  
6) The whale is in profit (short entry $3950, current price $3730)  
7) The whale starts to close the short position, but slowly, to avoid moving the price, average close = $3850  
8) The whale earns 2.5% (3950/3850) of $70M = $1.7M in just a few hours?  
it started with $700K and now has $2.4M!? and the worst part is that it can do it again and again?

Even if the numbers are not correct, is possible for a whale to do something like that and not only move the market but also take profit on that movement, without any risk?

I think this should not be possible, because is too easy. But I cannot understand what is stopping a strategy like that to actually work.

**Can somebody help me to understand what is the problem with that strategy?**

EDIT: I can see a downvote and no comment, please if you are going to downvote at least explain why so I can learn to ask better or edit the question.

**Tags:** trading, exchange-rate

> **Comments:**
> **username_1**: There are some close votes citing "Questions on current or future market values, energy costs or service provider availability are off-topic as the answers are changing too frequently to be useful to others.". This question is not about current market values, it's about a mechanism being used to manipulate the market explained with help of a recent example.  

---

## 2 answers

### Answer by username_2 on 2019-01-12. Score: 0

This is a standard scheme for stocks, and it of course works for crypto-currency as well. It is considered unfair and therefore not allowed in the stock markets.

Crypto-Currencies are mostly unregulated, so it is legal to do.  
Feel free to join and do it too.

> **Comments:**
> **username_0**: so you are saying that strategy works? it does not make sense,because is so simple that as you have said anybody with less $1M could do it. Why the big investors will fight in stock market then instead of just using this strategy in crypto? To me is obvious there is a problem with the strategy but I cannot understand what it is  
> **username_2**: It is illegal in the stockmarket. The regulator watch for it, and they'll come after you if you try it.  
> **username_0**: I know, what I'm saying is that why the big investors are trading in stock market if they have the chance to trade so easily manipulating the crypto market?  

---

### Answer by username_3 on 2020-12-18. Score: 0

Turns out that this was illegal for BitMex as well.

See their federal indictment: <https://www.justice.gov/usao-sdny/pr/founders-and-executives-shore-cryptocurrency-derivatives-exchange-charged-violation>

[![enter image description here](https://i.sstatic.net/0OWjJ.png)](https://i.sstatic.net/0OWjJ.png)

> **Comments:**
> **username_0**: What is the relation with this topic? the problem there was with the anti-money laundering policies, not market manipulation  

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