Crypto crash is often labeled as pure manipulation due to a combination of whale activities, media influence, market structure, and regulatory moves. Here's why:
1️⃣ Whale Manipulation:
Large investors (whales) dump massive amounts of crypto, causing panic selling.
They buy back cheaper after weak hands exit, profiting from the dip.
Examples: Fake sell walls, spoofing, and wash trading.
2️⃣ Media FUD (Fear, Uncertainty, Doubt):
Negative news like "crypto ban," "exchange hack," or "regulation crackdown" often spreads before crashes. Media outlets and influencers create panic, making retail traders sell in fear.
Institutions and whales buy the dip once the panic settles.
3️⃣ Leverage Liquidations:
Many traders use high leverage (e.g., 50x, 100x) in futures trading.
A slight price drop triggers mass liquidations, accelerating the crash.
Market makers profit from these liquidations, wiping out retail traders.
4️⃣ Coordinated Attacks:
Crypto crashes often follow a similar pattern—huge dumps, media FUD, and massive liquidations.
Institutions or whales coordinate these moves to maximize profits.
Example: LUNA & FTX crashes—both involved planned market collapses.
5️⃣ Regulatory Pressure:
Governments or regulatory bodies often release negative news about crypto at crucial times.
Examples: SEC lawsuits, CBDC promotion, or banking restrictions on crypto transactions.
This forces retail investors to exit, while institutions secretly accumulate.