Bitcoin Price Manipulators: Definition, Tactics, Impact, and How to Deal

Bittime - Bitcoin, the world's most famous crypto asset, has become a hot topic of conversation among investors, traders and market observers. However, behind its high volatility, price manipulation sometimes occurs which affects the market significantly. So, what are the tactics of Bitcoin price manipulators? What impact will it have on the market and how can traders deal with it?

Check Today's Crypto Market:

What are Bitcoin Price Manipulators?

Bitcoin price manipulators are parties or entities that use various tactics to control or manipulate the price of Bitcoin with the aim of making a profit. They may use a variety of strategies, including wash trading, spoofing, pumping and dumping, and the use of automated trading bots to create the illusion of high trading volume or trigger price movements, but not due to actual market demand.

Tactics Used by Bitcoin Price Manipulators

1. Wash Trading

Wash trading occurs when manipulators buy and sell assets to themselves with the aim of making trading volumes appear high. This will create the illusion of high liquidity and can trick unwary investors into entering or leaving the market.

2. Spoofing

Spoofing is a tactic where a manipulator places large orders to buy or sell an asset with the aim of influencing the price. However, the order is withdrawn before execution thereby creating the impression of high or low demand or supply. This tactic can trigger an adverse market reaction for other traders.

3. Pumping and Dumping

Pumping and dumping occurs when manipulators buy assets in large volumes to artificially increase the price of Bitcoin (pumping), then sell them in large quantities (dumping) to make a profit. This can cause losses for investors who realize the manipulation too late and buy assets at prices that are too high.

4. Automated Trading Bots

Manipulators can also use automated trading bots to execute trades automatically based on pre-programmed algorithms. These bots can be used to create unnatural price movements. Additionally, these bots can also be used to exploit gaps in the market by executing large trades in a short period of time.

Also read:

Impact of Bitcoin Price Manipulators

The impact of the tactics carried out by Bitcoin price manipulators can be very significant and have a broad impact on the crypto market and the players in it. Below are some specific impacts that can be felt as a result of Bitcoin price manipulation practices.

1. Volatility is getting higher

One of the most visible impacts of Bitcoin price manipulation is increased volatility. When Bitcoin prices are manipulated, extreme and unnatural price movements often occur in a short period of time. 

This can create uncertainty and anxiety in the market and cause investors to become hesitant and find it difficult to make the right trading decisions.

2. Loss of Trust

Bitcoin price manipulation can undermine investors' confidence in the integrity of the crypto market as a whole. When price manipulation is uncovered, this can cause investors' confidence in the crypto market to drop drastically. 

As a result, investors may become more wary and less motivated to engage in crypto trading, which could hinder further growth and adoption in the industry.

3. Financial Loss

One of the most direct impacts of Bitcoin price manipulation is the financial losses incurred by investors who are victims of this practice. 

For example, in the case of pumping and dumping, investors who are late in realizing market manipulation and purchasing Bitcoin at a high price can suffer significant financial losses when the price drops sharply after the dumping is carried out by the manipulator.

4. Influence on Market Sentiment

Bitcoin price manipulation can also affect overall market sentiment. When significant price manipulation occurs, this can create fear and anxiety among investors. 

This negative market sentiment can continue for quite a long period of time. It can even influence investor behavior and produce a wider domino effect in the crypto market.

5. Tighter Regulations

The impact of Bitcoin price manipulation may also encourage governments and regulatory bodies to take further action in tightening regulations on the crypto market. 

As price manipulation becomes increasingly troubling, governments may feel the need to establish stricter rules and monitor markets more closely to protect investors and maintain market integration.

Also Read; What is Crypto Investment?

How to Deal with Bitcoin Price Manipulators

Dealing with Bitcoin price manipulators is a real challenge for traders and investors in the crypto market. While it is impossible to completely eliminate price manipulation, here are some steps you can take to reduce the risk and protect yourself from its impact.

1. Do In-depth Research

One of the best ways to deal with Bitcoin price manipulators is to do in-depth research on the crypto asset you are trading. Learn as much as you can about the project, its underlying technology, its development team, and other fundamentals that can affect the value of the asset. By understanding the assets being traded, you will be better able to identify unusual price movements and act wisely.

2. Monitor Technical Indicators

Use technical indicators such as moving averages, Relative Strength Index (RSI), and trading volume to confirm actual price movements and identify potential market manipulation. This indicator can help you recognize true market trends and differentiate them from price movements triggered by manipulators.

3. Use Stop-Loss Orders

Set stop-loss orders to limit your losses if the asset price drops suddenly due to market manipulation. By setting stop-loss orders, you can protect your capital from unexpected losses and reduce the risk of extreme price movements.

4. Be Aware of Signs of Manipulation

Be alert for signs of market manipulation such as unusual price changes, disproportionate trading volume, or rapid placement of large orders in the market. If you suspect price manipulation, consider exiting the market temporarily or taking other necessary actions to protect your position.

5. Join a Community

Join the crypto trader community and join the discussion about potential Bitcoin price manipulation. Sharing information and experiences with other traders can help you stay alert to potential market manipulation and identify new tactics used by manipulators.

6. Report to the Regulatory Body

If you suspect detrimental Bitcoin price manipulation, consider reporting it to the appropriate regulatory agency. Regulatory bodies such as the Commodity Futures Trading Commission (CFTC) in the United States or the Financial Conduct Authority (FCA) in the United Kingdom can investigate manipulative practices and take appropriate action against the perpetrators in question.

Conclusion

Bitcoin price manipulators are a serious threat to the crypto market that can influence asset prices and harm unwary investors. By understanding commonly used manipulation tactics and taking appropriate preventive measures, traders can reduce risks and protect themselves from the negative impacts of Bitcoin price manipulation. It is important to always be alert and careful when trading crypto, and to continually update your trading knowledge and skills to face the challenges of an ever-changing market.

Also Read: What is Blockchain?

How to Buy Bitcoin (BTC) with Bittime

Are you interested in buying and investing in Bitcoin? If you are interested, you can buy it on Bittime. BTC tokens are available on Bittime in BTC IDR pairing. 

Here's a guide on how to buy BTC tokens on Bittime. 

• Register for an account on Bittime using an active email. 
• Complete the identity verification process.  
• Once your account is verified, open the Bittime app.
• Select the Markets menu or click on the icon with the chart. 
• Select the IDR pairing to buy BTC with Rupiah.
• Click 'Buy'.
• Choose the type of order to use. Limit orders, market orders, and stop orders are available.
• Enter the amount of rupiah to buy BTC.
• Click the 'Buy BTC' button. 
• A notification pop-up will appear. Read it carefully and click 'Confirm'. 
• Enter your six-digit Transaction PIN.
• The app will display a successful order notification. 
• Check your BTC balance in your e-wallet after a successful transaction.

To see a complete guide on how to buy Bitcoin (BTC), you can click here.

Apart from buying Bitcoin (BTC), you can also buy various crypto assets, such as ETH, USDT, SOL, ADA, AVAX, DOGE, and many others. Monitor graphic movement of Bitcoin (BTC) price, Ethereum (ETH), Solana (SUN) and other cryptos to find out today's crypto market trends in real-time on Bittime.

Buying and selling crypto assets on Bittime is easy, safe, and instant. Bittime is officially registered and supervised by Bappebti and Kominfo.

Read Also:

What Are Nodes?

What are Smart Contracts?

What is Bitcoin and How Does It Work?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.