Recently, during the sideways fluctuations in the BTC market, a phenomenon known as "Major Player Inducement Order Tactics" has emerged.
Major funds frequently place short-lived huge orders at the level of hundreds of millions of dollars, meaning that after a large buy order appears on the order book, it is quickly canceled before the transaction is completed.
This operation is not a normal market behavior, and there are three underlying purposes:
Psychological Induction Battle: Major players create large orders to stimulate retail investors' buying enthusiasm, leading retail investors to mistakenly believe that the market is about to reverse, and they rush to buy in, while major players take the opportunity to sell at high prices.
Market Testing Technique: These short-lived huge orders are used to test market depth and reactions, observing whether the support on the order book will collapse and whether slippage exceeds expectations.
Behavioral Chain Deception: Major players manipulate market sentiment through the process of placing orders, canceling them, and executing transactions, using fake orders to guide retail investors, ultimately selling at even higher prices.
To avoid falling into these traps, investors can use four filters:
Transaction Rate: Pay attention to huge orders with a transaction rate exceeding 80%.
Time Window: Set a 5-minute observation window and ignore orders that exist for too short a time.
Amount Threshold: Only focus on large orders above 10 million dollars.
Behavior Verification: Confirm whether there is an immediate opposite action after an order is canceled.
