Exposing the AUCTION Market Manipulation Game: Passive Sell Orders Were Used to Covertly Offload

A covert and efficient manipulation game unfolded over the weekend.

Author: Fairy, ChainCatcher

Editor: TB, ChainCatcher

A covert and efficient manipulation game unfolded over the weekend.

In just a few weeks, an unknown entity accumulated over 20% of the total supply of AUCTION, driving up trading volume, increasing open interest, and pushing CVD continuously upward. Everything seemed to indicate a strong bullish trend. However, behind the scenes, the "whales" were quietly and precisely offloading their positions.

The token price exhibited a "Christmas tree" pattern, seemingly climbing steadily but hiding deadly traps. What kind of manipulation strategy is at play? How did the "whales" manage to offload large amounts under the guise of a "bullish advantage"? This article will delve into the truth behind this manipulation scheme.

Recently, the rapid rise and fall of AUCTION has become a hot topic in the ChainCatcher community.

AUCTION is the governance token of the Bounce Brand, which is a decentralized auction platform that integrates liquidity mining, decentralized governance, and staking mechanisms.

Last night, Bounce Brand issued a statement clarifying that the team did not participate in any price manipulation and disclosed a series of market anomalies:

Additionally, market liquidity has shown significant imbalance, presenting a series of unhealthy conditions:

Based on monitoring data from Yujin, we have compiled the recent key operational trajectories and price changes of AUCTION whales:

From the series of fund movements by the whales and the abnormal market conditions, it is evident that the price trend of AUCTION is not simply driven by funds; there is a more complex manipulation strategy behind it.

What is the manipulation strategy used by the "whales"?

During the sharp decline of AUCTION, market data presented a seemingly contradictory signal: CVD (Cumulative Volume Delta) continued to rise, funding rates kept increasing, and open interest was also on the rise.

According to conventional logic, when CVD rises and open interest increases, it usually indicates a large influx of active buy orders, and prices should rise. However, the price of AUCTION continued to fall, showing a clear market divergence.

According to analysis by crypto KOL Biupa-TZC, the "whales" employed a highly covert "passive sell order" strategy to offload large amounts in a market that appeared to be bullish.

1. Placing Massive Passive Sell Orders

The "whales" continuously placed oversized passive sell orders near the market price, allowing active buy orders to hit and execute.

Since the spot market is primarily controlled by the "whales," there are almost no active sell orders. The calculation of CVD is based on the volume of active buy orders minus the volume of active sell orders. In the absence of active sell orders, CVD continues to rise, but prices remain under pressure.

2. Creating the Illusion of "Price Stability"

The "whales" avoided actively crashing the market and instead made it appear that there were only buy orders, creating a false impression of a rising market for investors.

As CVD continued to rise and open interest increased, retail investors mistakenly believed that funds were actively flowing in, leading them to potentially go long or buy the dip.

3. Gradually Absorbing Market Buy Orders to Complete Offloading

The "whales" continuously placed new passive sell orders, eating away at the active buy orders one by one.

Whenever active buy orders hit the passive sell orders, a brief liquidity vacuum occurred in the market, prompting the "whales" to adjust their sell orders downward, causing prices to gradually decline.

Due to the large trading volume, these sell orders not only pressured prices but were genuinely selling, ultimately leading to a sharp drop in AUCTION prices.

The manipulation game ends, market alarm sounds

The dramatic rise and fall of AUCTION was the result of the "whales" meticulously orchestrating fund allocation and manipulation strategies.

Although Bounce Brand has provided liquidity support on multiple exchanges and locked up approximately 1.5 million AUCTION to stabilize market liquidity, this incident still exposed the hidden risks and complexities within the crypto market.

For ordinary investors, this serves as a profound lesson: in the face of highly volatile assets, blindly trading based on signals will only make one a pawn for the "whales." Only by staying vigilant and deeply analyzing market dynamics can one remain undefeated in the ever-changing trading arena.