币研老夫子
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How to determine if there are manipulators behind small-cap cryptocurrencies?
Many friends ask me, how to know if small-cap cryptocurrencies have manipulators behind them 'pumping' or 'dumping'? To understand this question, one must first clarify why manipulators like to use contracts to make money.
First, manipulators want to make money, and they need someone to oppose them. Currently, very few people are willing to directly buy those unpopular small coins. However, those who trade contracts tend to be bolder, and many like to short. Manipulators specifically target these short sellers, forcing them to buy back coins at high prices to cover their positions. As a result, the originally bearish shorts become manipulators' 'exit buyers'.
Second, trading in the contract market is more active than direct buying and selling; both buying and selling are easier.
Third, contracts can use leverage, allowing manipulators to control large trading volumes with very little money, making their profit efficiency particularly high.
Fourth, as long as manipulators control the circulating coins in the market, they can manipulate prices freely in the contract market.
For example, the sudden surge of OM coin was due to manipulators first hoarding all the coins in the market and then going long in the contract market. They then raised the coin price, completely crushing the short sellers, and used the profits to buy coins, creating a cycle that resulted in an increasing market capitalization for the coin.
Knowing this, to determine if a coin has manipulators at work, the key is to look at the open interest (OI) in the contract market. There are two specific methods:
First, look at the size of open interest. If the open interest of a small-cap coin is higher than its own market capitalization, there is definitely a manipulator or funds involved behind the scenes.
Second, keep a close eye on the changes in open interest. If there is a sudden significant increase in open interest, it is likely that manipulators are going long or short; if the open interest suddenly decreases, it may be that manipulators are closing positions. Once such situations are discovered, one might just be able to profit alongside the manipulators. Just like before with the two coins Turbo and BroccoliF3B, whenever manipulators were going long or closing positions, there would be particularly noticeable changes in open interest.
Many friends ask me, how to know if small-cap cryptocurrencies have manipulators behind them 'pumping' or 'dumping'? To understand this question, one must first clarify why manipulators like to use contracts to make money.
First, manipulators want to make money, and they need someone to oppose them. Currently, very few people are willing to directly buy those unpopular small coins. However, those who trade contracts tend to be bolder, and many like to short. Manipulators specifically target these short sellers, forcing them to buy back coins at high prices to cover their positions. As a result, the originally bearish shorts become manipulators' 'exit buyers'.
Second, trading in the contract market is more active than direct buying and selling; both buying and selling are easier.
Third, contracts can use leverage, allowing manipulators to control large trading volumes with very little money, making their profit efficiency particularly high.
Fourth, as long as manipulators control the circulating coins in the market, they can manipulate prices freely in the contract market.
For example, the sudden surge of OM coin was due to manipulators first hoarding all the coins in the market and then going long in the contract market. They then raised the coin price, completely crushing the short sellers, and used the profits to buy coins, creating a cycle that resulted in an increasing market capitalization for the coin.
Knowing this, to determine if a coin has manipulators at work, the key is to look at the open interest (OI) in the contract market. There are two specific methods:
First, look at the size of open interest. If the open interest of a small-cap coin is higher than its own market capitalization, there is definitely a manipulator or funds involved behind the scenes.
Second, keep a close eye on the changes in open interest. If there is a sudden significant increase in open interest, it is likely that manipulators are going long or short; if the open interest suddenly decreases, it may be that manipulators are closing positions. Once such situations are discovered, one might just be able to profit alongside the manipulators. Just like before with the two coins Turbo and BroccoliF3B, whenever manipulators were going long or closing positions, there would be particularly noticeable changes in open interest.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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