One-day plunge of 60%: Unveiling the secret trading techniques of AUCTION whales
What kind of operation layout is this? How does the "big player" complete large-scale selling in a situation that "seems to favor the bulls"?Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
A covert and efficient manipulation game unfolded over the weekend.
In just a few weeks, an unknown entity accumulated over 20% of the total supply of AUCTION, driving a surge in trading volume, an increase in open interest, and a continuous rise in CVD. Everything seemed to indicate a strong bullish market. However, behind the scenes, the "whales" were quietly and precisely offloading their positions.
The token price exhibited a "Christmas tree" pattern, seemingly climbing steadily, but in reality, it concealed hidden dangers. What kind of manipulation strategy is at play? How did the "whales" manage to offload a large amount of tokens under the guise of a "bullish market"? This article will delve into the truth behind this manipulation scheme.
AUCTION Market Anomalies: The Trajectory of Whale Manipulation Emerges
AUCTION is the governance token of Bounce Brand, which is a decentralized auction platform that integrates liquidity mining, decentralized governance, and staking mechanisms.
Last night, Bounce Brand issued a statement clarifying that the team did not participate in the manipulation of AUCTION prices and disclosed a series of market anomalies:
- In the past few weeks, an unknown entity has accumulated over 20% of the total supply of AUCTION.
- AUCTION trading volume surged significantly on major exchanges, with AUCTION futures trading pairs on Binance becoming the third-largest trading pair after BTC and ETH. AUCTION spot trading volume on Upbit has surpassed BTC for several consecutive days.
- AUCTION trading prices on Upbit showed significant premiums, with a large amount of AUCTION being withdrawn from mainstream exchanges for arbitrage trading.
Additionally, market liquidity has shown significant imbalance, presenting a series of unhealthy conditions:
- The holdings in Binance's hot wallet have plummeted, currently holding less than 10% of the total supply of AUCTION.
- Lending rates have annualized over 80%, with funding rates remaining at -2% across multiple periods.
- Major exchanges have adjusted the position limits and risk control measures for AUCTION perpetual contracts.
Based on monitoring data from Yujin, we have compiled the recent key operational trajectories and price changes of AUCTION whales:
From the series of fund movements by the whales and the abnormal market conditions, it is evident that the price trend of AUCTION is not simply driven by funds; there is a more complex manipulation strategy behind it.
Covert Offloading Technique: The "Passive Sell Order" Manipulation Strategy
During the sharp decline of AUCTION, market data presented a seemingly contradictory signal: CVD (Cumulative Volume Delta) continued to rise, funding rates kept increasing, and open interest also grew. According to conventional logic, when CVD rises and open interest increases, it usually indicates a large influx of active buy orders, and prices should rise. However, AUCTION's price continued to fall, showing a clear market divergence.
According to analysis by crypto KOL Biupa-TZC, the "whales" employed a highly covert "passive sell order" strategy to offload a large amount of tokens in a seemingly bullish market.
1. Placing Large Passive Sell Orders
The "whales" continuously placed large passive sell orders near the market price, allowing active buy orders to hit and execute.
Since the spot market is primarily controlled by the "whales," there are almost no active sell orders in the market. CVD is calculated as the volume of active buy orders minus the volume of active sell orders. In the absence of active sell orders, CVD continues to rise, but prices remain under pressure.
2. Creating the Illusion of "Price Strength"
The "whales" avoided actively crashing the market and instead made it appear that there were only buy orders, creating a false impression of a rising market for investors.
As CVD continued to rise and open interest increased, retail investors mistakenly believed that funds were actively flowing in, leading them to potentially take long positions or bottom-fish.
3. Gradually Absorbing Market Buy Orders to Complete Offloading
The "whales" continuously placed new passive sell orders, absorbing the active buy orders one by one.
Whenever active buy orders hit the passive sell orders, a brief liquidity vacuum occurred in the market, prompting the "whales" to adjust their sell orders downward, causing prices to gradually decline.
Due to the large transaction volume, these sell orders not only pressured the price but were genuinely selling, ultimately leading to a sharp drop in AUCTION prices.
The Manipulation Game Concludes, Market Alarm Sounds
The dramatic rise and fall of AUCTION was the result of the "whales" meticulously orchestrating fund allocation and manipulation strategies. Although Bounce Brand has provided liquidity support on multiple exchanges to stabilize market liquidity and locked up approximately 1.5 million AUCTION, this incident still exposed the hidden risks and complexities within the crypto market.
For ordinary investors, this serves as a profound lesson: in the face of highly volatile assets, blindly trading based on signals will only make one a pawn in the "whales'" game. Only by remaining vigilant and deeply analyzing market dynamics can one stand firm in the ever-changing trading arena.
