Information Manipulations on the CryptoMarket
Section #Fomo
Information manipulation (hereinafter referred to as IM) is the use of false information or the 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 do not have immunity to IM, and there are no regulators and a mechanism on the market to hold the organizers of such manipulations accountable. Consequently, in such markets, IM is used as a tool for making profit by everyone who has sufficient resources to launch and use such manipulations.
The CryptoMarket is ideal for IM. There is no responsibility for this. “Hamsters”, “deer” and other unstable market participants are easily amenable to greed and fear. The capitalization of the entire CryptoMarket is less than half the cost of Apple, and it can easily be moved in relatively small amounts. Therefore, IM of different scales occur constantly on the CryptoMarket.
It is important for a successful crypto trader to resist these manipulations and not to lose money on them. Understanding the IM mechanism will make it possible to quickly identify the manipulations and make money on them. Admit that this is some 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 earn money on IM.
The essence of IM is to make a person turn off the brain and be guided by emotions. Somewhere in the vastness of the CIS (in my opinion, in Ukraine), I once saw the slogan "Vote with your heart". Instead of your brain:) This is the whole point of IM.
But back to the crypt. The main IM are divided into two areas - FOMO and FUD.
FOMO plays on greed, FUD - on fear. I already wrote earlier here about FOMO: "Combating FOMO".
When people take a loan to buy Bitcoin at 20K, but buy some kind of coin on high, because “it’s growing,” or they don’t sell a coin that has already brought X2, expecting it to bring X3 – they are definitely under FOMO influence.
When a person who took a loan for Bitcoin at 20K sells it for 3-5K, believing that it will fall even lower, or when he/she merges altos with a Bitcoin dominance index of 60%, such person is under FUD influence.
FUD-based IMs occur quite often. Most often, large-scale IMs are made on the basis of real events, interpreting them extremely negatively for the entire CryptoMarket or for a certain category of its participants.
For example, when in September 2017 Bitcoin almost reached 5K, suddenly the news popped up that China had banned crypto-exchanges. That China would soon ban mining, and in the future it would also ban ownership of the crypto and would shoot for Bitcoin (and only for the last point it was said that this was not verified information, and everything else was presented as an undeniable fact). Bitcoin expectedly fell by almost 30%, deer and hamsters were selling Bitcoins at 3,500 which had been previously purchased for 4,500. They were finding themselves extremely lucky thinking that they had managed to do this in time, because soon it would sell for 2000-1000-500.
What was really happening - they adopted a resolution in China on the need to regulate cryptocurrency exchanges. Which in itself is more likely a benefit for the industry. It means recognition by government agencies. But the organizers of the IM approached this well, and successfully purchased Bitcoin at 3500.
Deer and hamsters sold Bitcoin at 3500. Expecting to buy it for more than 10-12K in 2 months. Or in 3 months at 18-20K. All major exchanges in China continued their operation as before, some moved to Hong Kong.
Within a month after this fall, Bitcoin was already 5700.
Here is the recent story with Binance. They stated that they would work with American citizens through a separate unit, completely in the US legal field. You would think - a totally positive move. But it was presented as if Binance was banned from working in the United States. Thus BNB and other coins traded there will fall dramatically. At the same time, the phrase that the Americans is 25% of Binance users and the lists of coins that would supposedly fall, appeared simultaneously in a number of foreign media, and from there were brought to Runet.
Considering that this IM occurred immediately after BnB reached its 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, now it is said that Litecoin halving will increase its price significantly. Of course, it will grow, as it is a top crypto, and the dominance of Bitcoin is now more than 56%. But together with the market, it is comparable with the Ether and Bitcoin Cash.
Another example is December 2017. Bitcoin futures were introduced on SME and CBOE. Everyone said that Bitcoin would grow to 30-50-100K. Although it is obvious that while before futures one could only earn on the growth of the Bitcoin, now a tool is emerging to make earning on the fall as well. And this tool will obviously be actively used. By the way, I said this in December 2017:
https://mmgp.com/showthread.php?t=552544&page=1#post13879864
How to detect information manipulation?
Analyse information in terms of logic and common sense. If it involves 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 that’s the truth.
Pay attention to the source. When and where did the message appear, how is it interpreted in different media? If it appears at the same time and with the same text, the same conclusions in different media – it is very likely to be IM.
The imposition of a positive (with FOMO), or negative (with FUD) scenario is a sign of IM.
How to resist information manipulation?
Turn on your 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). And do the opposite. If the organizers of the manipulation disperse the FUD script, it’s time to buy. Not immediately, but when they get the result, that is, when they collapse the price of the asset as much as possible. That is exactly how a couple of days ago I bought BnB just above $ 32.
If by means of IM FOMO is dispersed, it is time to sell, when we reach the peaks and growth stops.
By working this way, you won’t become hamsters and deer (the objects of IM), for one thing, but you will also make a profit, the conditions for which were created by the organizers of information manipulations. They dupe the crowd - you skim the cream together with them. You cannot organize an IM yourself, but you can use the results, because the goals of the IM organizers (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.
In order to have the right reaction to IM, it is important to be able to evaluate information sources.
This will be the topic of the next article.
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