The 'shady operations' of exchanges (platforms):
Fake Volume
What does it mean? It's when exchanges manipulate data, dressing themselves up nicely to pretend they are very popular and bustling, deceiving everyone to come and play.
How does it work? Internally, exchanges use programs to trade between themselves, creating massive trading data. You see their daily trading volume in the hundreds of billions and think it’s a big deal, but when you look closer, much of it is fake, like 'zombie followers.'
For example: A certain exchange claims its daily trading volume could circle the globe, but when you place a large order, it takes forever to fill, or the price doesn't budge at all—this is them 'brushing orders' to show you! False prosperity, true cutting of chives.
Price Spikes/Downtime
What does it mean? This is when you are having a great time with high leverage, and suddenly they hit you with a 'flash crash' or 'signal loss,' causing you to get liquidated instantly, losing everything.
How does it work? When the market trading volume is small, the exchange or its 'insiders' suddenly conducts a massive trade, causing the price to spike or crash instantly, piercing through like a 'needle.' Before you realize it, your high-leverage position has vanished into thin air. Sometimes, at critical moments, there might 'coincidentally' be system maintenance, leaving you unable to act.
For example: You are happily going long on Bitcoin, then suddenly the screen flashes, and the price drops from $60,000 to $50,000 before bouncing back up. Your position is gone, and the app shows 'server busy, please try again later.' When you finally get back in, all that's left is 'congratulations, you got liquidated.' This isn't market fluctuation; it's clearly a 'precision strike'!
Insider Trading
What does it mean? Platform insiders know news in advance and secretly profit.
How does it work? For example, if a small coin is about to be listed on a major exchange, this is major positive news! Before the news is made public, the exchange's 'connections' or 'insiders' rush to buy large amounts in advance. Once the news is announced, the price skyrockets, and they sell at high prices, easily making a fortune.
For example: A small coin you've never heard of suddenly sees its trading volume drastically increase before being listed on a major exchange, and the price starts to rise quietly. When the exchange officially announces it, the price skyrockets, while those 'in the know' have already positioned themselves, just waiting for you to come in and 'pick up the tab.'
Listing Control
What does it mean? The exchange makes money by deciding which coins can be listed.
How does it work? Many project teams will pay a large 'listing fee' to exchanges to get listed, and some may even give a portion of their coins to the exchange. Once the exchange receives the money, they will aggressively promote the coin to help drive up its price. When retail investors rush in, the exchange and the project team may 'jointly harvest' profits.
For example: A newly launched 'animal coin' is suddenly heavily recommended by a top exchange, with extensive promotion and events. On the listing day, the price skyrockets by dozens of times, creating a FOMO (fear of missing out) atmosphere across the net. But soon after, the price plummets, returning to where it started, leaving countless 'chives' (investors) confused in the wind.
Whales' 'cutting chives' tactics:
Pump and Dump
What does it mean? First, they drive up the price, enticing retail investors to chase the rise, then they escape at high prices, leaving the mess for retail investors.
How does it work? Whales will quietly accumulate a large number of tokens at low prices. Then they start various 'bullish' promotions, using media, KOLs, and communities to spread favorable news, creating an atmosphere that 'this coin is about to soar.' At the same time, they will use small amounts of capital to 'ignite' the price, attracting retail investors to follow suit. Once the price is driven up to a certain level by retail investors, the whales start to secretly 'dump' their tokens at high prices, selling them to you before they retire successfully.
For example: A normally stagnant altcoin suddenly sees the community filled with slogans like 'go all in' and 'financial freedom,' with various analysts also starting to call for buys. You look at the K-line and see a promising upward trend, so you can't help but jump in. As soon as you buy, the price starts to plummet, and you realize you've become the 'bag holder,' buying coins instead of the project. Meanwhile, those calling for buys have already made a fortune.
Bear Raid/Dump and Buy Back
What does it mean? First, they crash the price to scare retail investors into selling at a loss, then they quietly buy back at low prices.
How does it work? Whales first disregard everything and directly start selling large amounts of Bitcoin or a certain coin in the market, or even shorting it by borrowing coins, rapidly driving the price down and creating panic. Retail investors see this, thinking, 'Oh no, it's crashing!' and quickly sell off their holdings. Once retail investors panic and sell off, driving the price down to a point the whales are satisfied with, they begin to buy back in batches, quietly reclaiming the tokens they sold at a much lower price.
For example: Bitcoin rises to over $60,000, then suddenly experiences a 'cliff-like drop,' with the market in despair and various 'the bear market is here' voices echoing. You see this situation and hurriedly sell your coins at a low price. Not long after, the price begins to slowly rise again, and those who bought at the bottom are precisely the whales who caused the crash.
Wash Trading
What does it mean? Creating false trading volume and activity to deceive other investors into thinking this coin is very popular.
How does it work? Whales open multiple accounts and play 'house' with themselves. For example, one account places a buy order while another places a sell order, and they trade with each other. This creates the illusion of huge trading volume and activity, but in reality, the coin hasn't changed hands at all; it's just fabricating false prosperity.
For example: You see a very obscure coin on a small platform, and suddenly its daily trading volume shoots up to the top three on the leaderboard. You click in and find that within seconds, there are hundreds of small transactions, and the price hardly changes. This is likely a whale 'brushing volume' to create the illusion that 'this coin is very hot.'
Spoofing
What does it mean? Placing a bunch of fake orders to confuse you and lead you to make wrong judgments.
How does it work? On the buy-sell order books, whales will place some particularly large buy or sell orders (for example, a buy order for several thousand Bitcoins), but these orders are not genuinely intended to be filled. They just want you to think there is strong support below or immense pressure above. Once you are misled by these fake orders and make a judgment, the whales will instantly withdraw these orders and carry out the real trades, catching you off guard.
For example: When the price of Bitcoin is rising, suddenly a 'massive' sell order appears at the sell one position, like 500 Bitcoins waiting to be sold. Many people chasing the rise see this and think, 'Wow, there's huge pressure above, let's wait to buy.' As a result, before the price even touches that large sell order, it suddenly disappears, and the price continues to surge. Do you feel like you've been played? This is the classic tactic of 'order book deception.'
In summary, the coin market is a 'battlefield without gunpowder,' with exchanges and whales employing many tricks, all aimed at making money from the fluctuations in coin prices. Therefore, keep your eyes open, learn more, prioritize protecting your principal before pursuing profits, and don't let emotions control you!!
How have you been cut before? What methods of 'cutting chives' do you know? Feel free to leave a comment.