June 10, 2023

Information manipulations on the cryptocurrency market

An author's article by Pavel Gromov, a trader and author of the telegram channel "The Chief in Crypt".

Information manipulation (hereinafter referred to as MI) isuse of false information or misinterpretation of true information. IM are used by initiators to achieve their goals in politics, business and in financial markets.

If the market is young and immature - participants are nothave immunity to myocardial infarction, and there are no regulators on the market and no mechanism to hold the organizers of such manipulations accountable. Consequently, in such markets, MI is used as a tool for making profit by everyone who has sufficient resources to launch and use such manipulations.

The crypto market is ideal for IM. There is no responsibility for this, “hamsters”, “deers” and other unstable market participants easily succumb to greed, fear, and the capitalization of the entire cryptocurrency market is less than half the cost of Apple, which makes it possible to easily move it in relatively small amounts. Therefore, IMs of different scales occur constantly on the cryptocurrency market.

A crypto trader who wants to succeedIt is important not to become the object of these manipulations and not to lose money on them. Understanding how the MI mechanism works will make it possible to quickly identify these manipulations and make money on them. Agree that this is a good topic - someone organizes and pays for IM, and we skim the cream without any special costs and risks. Moreover, there is no need for any ingenious analytical abilities - everyone can learn how to not lose at first, and then make money on MI.

The essence of IM is to make a person turn off the brain andbe guided by emotions. Somewhere in the CIS (in my opinion, in Ukraine), I once saw the slogan “Vote with your heart”. Instead of a brain? This is the whole essence of THEM.

But back to the crypt. The main IM are divided into two areas - FOMO and FUD.

FOMO plays on greed, FUD plays on fear. About FOMO, I wrote earlier here: "Fighting FOMO"

When a person goes to take a loan to buyBitcoin at 20K, buys some kind of coin on highs, because “it’s growing,” or does not sell the coin that has already brought X2, expecting it to bring X3 - it is under FOMO.

When a person who took a loan for Bitcoin at 20K sells it for 3-5K, assuming that he will fall even lower, or when he merges altos with a Bitcoin dominance index of 60%, he is under FUD.

FUD-based MIs occur quite often. Most often, large-scale IMs are made on the basis of real events, interpreting them extremely negatively for the entire cryptocurrency market or for a certain category of its participants.

For example, when in September 2017, Bitcoin is almostreached 5K, suddenly from every iron they began to broadcast that China had banned cryptocurrency exchanges, would soon ban mining, and in the future would ban ownership of the crypto and would shoot for Bitcoin (and only for the last paragraph they said that this was not verified information, and everything else was presented as irrefutable fact). Bitcoin expectedly fell by almost 30%, deer and hamsters merged previously bought for 4,500 Bitcoins of 3,500 each, and thought they were very lucky that they had time, because soon there will be 2000-1000-500.

What was really - in China they accepteddecree on the need to regulate cryptocurrency exchanges. Which in itself is rather a plus for the industry, as it means recognition by the state. But the organizers of IM did a good job of this and successfully purchased Bitcoin at 3,500.

Deers and hamsters sold Bitcoin for 3,500 so that alreadyafter 2 months, buying it is more expensive than 10-12K. Or after 3 months of 18-20K. All major exchanges in China mainly worked, how they work, some moved to Hong Kong.

Within a month after this fall, Bitcoin was already 5700.

From a recent story with Binance. They said that they would work with American citizens through a separate unit, completely in the US legal field. It would seem - a complete positive. But it was presented as if Binance had been banned from working in the United States, which is why BNB and other coins traded there would plummet. At the same time, the phrase that the Americans are 25% of Binance users and the lists of coins that supposedly fall, appeared simultaneously in a number of foreign media and was already brought from there to Runet.

Given that this MI occurred immediately afterreaching BNB next maximum, the conclusion is obvious - someone really wanted to buy BNB at 32. And this someone has enough resources to organize a large-scale IM.

There are IMs working on FOMO. For example, in the summer of 2019, they shouted from each iron that immediately after a halving, the cost of LTC will increase significantly. Of course, it will grow, as it is a top crypto, but together with the market, almost simultaneously with ETH and BCH.

Another example is December 2017, when futures were introducedon Bitcoin on SME and ITS and everywhere they said that now Bitcoin will grow to 30-50-100K. Although it is obvious that while before futures one could only earn on the growth of the cue ball, now a tool for earning on the fall appears. And this tool will obviously be actively used.

How to detect information manipulation?

Analyze information in terms of logic andcommon sense. If it is a decision of the regulator of a country, try to read the original. Pay attention to the wording, to the structure to which the authorship of the decision is attributed, to who voiced it. Remember that a message in some online media referring to “our source in the government” is not an official statement, and it does not bear any consequences. If we are talking about the problems of any exchange or coin - look for information on the official channel.

Drop the interpretation of the news in the media, evaluate it yourself. And if it seems to you that its meaning does not correspond to the interpretation, most likely it is.

Pay attention to the source when and whereA message appeared, how is it interpreted in different media? If it appears at the same time and with the same text, as well as in different media, they draw the same conclusions - it is very similar to IM.

The imposition of a positive (with FOMO), or negative (with FUD) scenario is a sign of MI.

How to resist information manipulation?

Turn on the brain first. Identify the signs of IM indicated above and what message they are trying to convey through IM (buy or sell, the entire crypto or specific coins). To do the opposite, if the organizers of the manipulation accelerate the FUD script - this is the time to buy. Not immediately, but when they get the result, that is, they will collapse the price of the asset as much as possible.

If FOMO is dispersed through IM, this is the time to sell, when we reach the peaks and growth stops.

By doing so, you will not only not become hamsters anddeer (IM objects), but also make a profit, the conditions for which were created by the organizers of information manipulations. They breed the crowd, and you skim the cream with them. You cannot organize an IM yourself, but you can use the results, because the goals of the organizers of an IM (growth or fall of an asset or the market as a whole) are calculated quite clearly. Be in the same boat with them, not with the crowd.

For a correct reaction to MI, it is important to be able to evaluate information sources.

We will talk about this in our next articles.

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