Earlier CZ posited his view that most investors who fall for the fake volume banana in the tailpipe won’t even bother to read the 227 page proposal.
Of course if you’ve been in this space for more than a week you have to admit that CZ has a point. Too many retail investors and traders approach crypto like buying lottery tickets or scratch offs and hoping for a win.
“When get listed on exchange so we can moon and buy lambo?”
C’mon peeps, stop being your own worst enemy. This mentality just attracts scammers and gets your easily separated from your chips.
Given these current market realities and the need to make things mor plain and accessible — I decided to net out the three tell tales signs to identify these exchanges with fake volume.
We can’t simply tolerate suspicious exchanges wash or pumping and dumping volume. Their goal is to make more money when they charge your project team to get listed. Then the leaders disappear into the night with your cash or say they got hacked. Ain’t nobody got time for that!
Here are the three clues with fake volume using their proprietary screen-shotting analysis tool.
Trade Size Histograms — for Well-Known Exchanges Show Natural Patterns
These histograms show the percentage of volume that is captured within each trade size bucket (0–0.1 , 0.1–0.2 , etc). They reveal consistent, intuitive patterns: Percentage weight in each bucket declines as trade size increases, and there are noticeable peaks at whole sizes (1, 2, 3, etc). X-axis is from 0 to 10 .
Volume Spike Alignment — Provides Another Vector of Analysis
In a globally integrated market like , you would expect exchange volume to rise and fall at the same time across all exchanges. It does for well-known exchanges. Many other exchanges, however, fail this test, showing disconnected and/or random patterns. Some of them maintain constant volumes over time while others rise and fall at different times than any other market.
Spread Patterning Analysis — Provides A Third Vector Of Analysis
Spreads on well-known exchanges show a consistent pattern, anchoring on zero with random variability, and then spiking periodically to reflect momentary surge in volatility and change of the order book. Spreads on suspicious exchanges exhibit a variety of anomalous patterns, including central tendencies that hover around an unusual fixed amount, or spreads that stay fixed for extended periods.
Now that you know three ways you can spot exchanges with fake volumes, take a holistic look when you’re considering or getting listed. And never leave your coins sitting on an exchange for an extended period of time.
Published at Sun, 24 Mar 2019 00:56:12 +0000
