Wikipedia:Reference desk/Archives/Mathematics/2024 September 28

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September 28

Bitcoin price rigging

I have been day trading bitcoin for almost a year now. I read articles from bitcoin news to try and guess when the dips and dives will happen and so far it has helped. I just read and article about bitcoin possibly losing freedom to governments and large institutions being able to rig the price. This has happened recently with the German government of Saxony selling off a hoard of seized coin, The Mt. Gox dispersal, and the US dept of Justice mysteriously moving 30/230k of its seized hoard two days after Trumps bitcoin speech in Nashville raised the price. https://mpost.io/u-s-unloads-2-billion-in-bitcoin-from-silk-road-seizure/

Is it possible for a whale (large bitcoin hodler) to make smaller transactions in a short time to move the price for a larger transaction at a later time? On the upswing this is called 'pump and dump' and 'poop and scoop' on the down swing. Both are illegal in most market trades.

This post may fit better in Humanities where finance is listed or IT where crypto may belong. 2604:3D08:5E7A:6A00:D94:3638:168B:18A0 (talk) 08:38, 28 September 2024 (UTC)

I'm pretty sure that this isn't a math question. But the article on Pump and dump does explicitly mention cryptocurrencies. --RDBury (talk) 13:22, 28 September 2024 (UTC)

The reason I posted in math is because I am wondering if a small buy or sell in a quick time frame will actually move the price enough for traders like me who watch the minute candle scale. I use MetaTrader 4 where the price moves in microseconds every time a buy/sell happens. Is there a formula for volume needed to move the price in a small time frame or article about time/volume/price/ ratio calculations?

Pump and dump, Bear raid, Short and distort, and Uptick rule, all help to explain how it is possible for whales to control the price. Fear_of_missing_out#Investing is the main cause of up-spikes since I have been investing and most are followed by dives. https://www.weforum.org/agenda/2024/08/explainer-carry-trades-and-how-they-impact-global-markets/ The carry trade crash the 1st week of August caused another huge dive. Foreign_exchange_market#Carry_trade2604:3D08:5E7A:6A00:D94:3638:168B:18A0 (talk) 17:48, 28 September 2024 (UTC)

The time needed to move the needle with high-frequency trading is a combination of the latency of the connection between the computers of the flash traders and those of the exchanges, which depends on the current state of the networking technology and the physical distance between the traders and the exchange, as well as any regulations enforcing a time lag. It then will take time before small-time traders can see the needle having moved. A mathematical model will require too many parameters to be of practical use.  --Lambiam 08:51, 29 September 2024 (UTC)