Crypto Crash: When Market Manipulations Generate Disaster
Based on the behavior, we have to distinguish between 2 main classes of bots across the cryptomarkets: - Traders - Manipulators The first group operates based on the anticipation of trends and patterns by feeding on historical and real-time data. The 2nd class of bots follows increasingly a swarm logic that serves a different purpose: Poisoning the market "wells" to feed the first category of bots with real-time fake data. By serving such strategies, these bots constantly act to promote or to prevent certain trends and patterns and hence behaviors in and by the average trader bots (and humans) that move along a predictive line of reasoning. This is a de facto poker game: Trading has become gambling!! Given that these hostile bots are run by rival P&D gangs and franc tireurs across highly fragmented and unregulated exchanges, there is always the possibility of triggering either a virtuous or vicious cycle that could become very powerful via an echo chamber effect. The end results are always unexpected and extremely difficult to anticipate. This happened before and now is in full development in front of us. Can OTC and DEX help to prevent the cyclic disasters? I wouldn't hold my breath!