[KVFinn]

Anyone have a link to a tl;dr on how market manipulation like this works? It seems like crypto-currencies are ripe for for this of thing and it doesn't take much money to do it.

Presumably the hidden information you have from being part of a cabal means it's different than just changing your risk distribution like a Martingale betting strategy does.

[socillion]

The way it works is to use a giant bid or ask wall to push the price around. Say the asset has bids at 220 and asks at 222, and you want to push the price downwards. You put up an ask of an amount equivalent to maybe 6hours volume at 224 (an "ask wall"). Anyone selling will put their orders below that wall, and as you slowly move the wall downwards people will sell into the market in the expectation that they can buy again once you've pushed the price lower than where they sold.

This relies on the large wall not being an attractive offer for someone who has the purchasing power to obliterate it, which is where it occasionally fails. Generally, if the market starts to move against it with any force, it's pulled or moved further back behind other orders.

Another way this can be used is by putting up a wall on the opposite side of your real order to drive demand - i.e. in the scenario above, you might be trying to buy at 220. If you put up a huge wall at 224, people will be more willing to fill your order at 220 than if the orderbook was much thinner.

It seems this is called spoofing in the financial world.

[HNaTTY]

That was a good explanation, except for the fact that I think you're referring to eg 220, 222, and 224 as the Satoshi/DOGE exchange rate, and by pushing the price downwards, you'll actually get more Satoshi for each DOGE.

Pushing the price "down" to 224 from 220 is very confusing and caused me to have to read your post several times to make sure I understood correctly.

[socillion]

I mean that putting a large sell order at 224 would make the buys (at the moment, at 220) move lower as the orders are filled by other people selling to them. You could then move the wall downwards, say to 221, when the sells in the orderbook had also moved downwards from 222. At this point the market's state would be something like buys at 218, sells at 220, and your wall at 221, effectively having pushed the market downwards from where you started.

I hope this made what I meant a bit clearer.