Market makers like #Wintermute manipulate prices through circular trading. #Binance sells to Wintermute, who sells to #Coinbase, then back to Binance who are all market makers. This inflates trade volume without real demand, pushing prices down.

By dumping assets, they trigger fear, stop-losses, and liquidations, fueling shorts and driving prices lower. Retail traders panic sell, while market makers profit from shorts and buy back cheap. It’s a controlled cycle to manipulate sentiment and price. Beware of these tactics.

How This Manipulates Prices Down and Fuels Shorts

1. High Trade Volume With Minimal Demand:

The repeated cycling of assets between these entities artificially inflates trading volume, making the market appear highly active.

Despite high activity, there's no new buyer demand entering the system, which prevents price recovery.

2. Dumping of Assets:

Wintermute or similar market makers can sell large volumes of assets across multiple exchanges (e.g., Binance and Coinbase). These bulk sales push prices downward due to the basic supply-demand imbalance (oversupply with weak demand).

Market makers are incentivized to lower prices intentionally to accumulate cheaper assets or profit from other strategies like short selling.

3. Short Selling Profits:

By driving the price lower, market makers fuel negative sentiment. Traders see falling prices and assume a bearish trend is forming, leading to increased short positions.

Wintermute, Binance, or Coinbase can capitalize on this by shorting the market, profiting from the price decline they orchestrated.

4. Reinforcing Downward Spirals:

As prices drop, stop-loss orders and liquidation of leveraged positions trigger further sales, accelerating the downward trend.

This cascading effect creates a bearish cycle, driving prices lower and further enriching market makers and shorts.

5. Market Sentiment Manipulation:

This cycle affects investor sentiment. Declining prices and high volume create fear among retail traders, leading to panic selling. This enables large players to scoop up assets at bargain prices once their shorting strategy concludes.

#draintheexchange #crypto #Altseason
#Wintermute #Binance #Coinbase