Cryptocurrency Selling vs. Wash Trading Ultimate Identification Manual
Market Language: A Complete Analysis of Order Book Dark Battles
1. Wash Trading Market Characteristics (Main Player Accumulation)
Selling Trap: Sell orders from Sell 1 to Sell 5 hanging with massive pressure (creating panic)
Case Study: On 2024/3 at ETH $3,500, a sudden sell order of 20,000 ETH appeared, yet the price couldn't drop
Buying Mystery: Thin buy orders but rapid transactions, key price levels are instantly filled with sell orders
Volume-Price Divergence: During a decline, trading volume shrinks by over 30% (no real selling pressure)
2. Selling Market Characteristics (Main Player Withdrawal)
Buying Scam: Buy orders from Buy 1 to Buy 5 piled up with huge support orders (inducing buyers)
Deadly Trap: Support orders can suddenly be withdrawn causing a price flash crash
Selling Truth: Upper sell orders appear scattered, but in reality, large orders are continuously sold
Transaction Details: Continuous appearance of 100+ BTC market sell orders (check Binance L3 data)
3. On-chain Data: Whale Movement Tracking Technique
1. Wash Trading Confirmation Signals
✅ Net Outflow from Exchanges: CoinGlass shows 24h net withdrawals > $50 million
✅ Concentration of Holdings: Top 10 addresses' holdings grow weekly > 3% (Santiment data)
✅ Increase in Open Interest Against the Trend: OI increases by over 5% when prices drop (main player support)
2. Selling Ironclad Evidence
⚠️ Whale Deposits: A certain address transfers to an exchange > 0.5% of circulation
Case Study: On 2023/11 at SOL $68, a certain whale deposited 2.8 million tokens to Binance
⚠️ Stablecoin Movement: Exchange USDT reserves increase by over 20% weekly (preparing buying funds)
4. Candlestick Patterns: Classic Trap Identification
Wash Trading Pattern
Golden Pit: Sharp decline with volume → Narrow trading range → Long bullish engulfing (recovering losses within 3 days)
Fishing Line: Early morning sharp rise of 5%+ to attract followers, afternoon decline engulfs gains
Volume Law: Wash trading with low volume (turnover rate < 15%), selling with high volume (turnover rate > 30%)
5. Self-Rescue Guide: 3-Step Stop Loss Strategy After Misjudgment
Immediate Action
Check On-chain Data: If Top 10 addresses reduce holdings by > 5% in 7 days → Unconditional liquidation
Observe Support Orders: If the thickness of buy support orders suddenly decreases by 50% → Market sell
Position Rescue
For being trapped deeply, operation plan < 10% rebound to 5-day moving average immediately stop loss 10%-20% in batches (if breaking previous low, cut 50%) > 30% hedge by shorting (lock in maximum loss)
Remember: When market and on-chain data contradict, always trust on-chain (whales won't act with real money in a play)
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