Market makers, how do they affect the price?
A market maker is a company that constantly places orders to buy and sell an asset. If you bought crypto on centralized exchanges, you noticed that when the mark is reached, the transactions are executed almost immediately. This is the merit of the market maker, who simplifies the trading process for you. In this case, the maker earns on a small difference between the purchase price and the sale price.
Since market makers are often hired by exchanges or projects themselves, in addition to placing orders, they can help with a number of other tasks.
1. Can create an artificial volume to show the illusion of the "popularity" of the asset.
2. Keep the price in the required corridor. If you have traded at least a little, you have seen a picture when the asset price has dropped and remains in one range for about 2-3 years.
3. Make a pump or dump. If you think that tweets and news make pumps and dumps, then know that this is not entirely true. Retail, which is dependent on news, does not have such volumes to create a "collapse" of the asset or its sharp growth.
4. Change hands by manipulating the price. This is the process when the asset passes into strong hands, ready to buy and hold the asset.
A market maker will always work in the interests of the company he works for. Retail in this situation often becomes part of the liquidity. But this is how it should be. If someone makes money in the market, then someone must lose the same money. Balance.