Market makers create excitement in the market by maintaining the liquidity of an asset. They reduce the spread between buying and selling costs. Without their activities, these figures could be enormous. Of course, liquidity in itself is good for projects, but that’s not all that market makers do. They are far from being kind Robin Hoods and pursue their goals by manipulating the market in their favor. They use techniques such as:
Inflating volumes This is self-purchase and self-sale of the same asset. Market makers do this to show the demand for a particular coin and to attract the attention of investors.
Artificial pumps and dumps Market makers can increase the value of the token at any time. This can be done using large orders. This behavior is typical for low-liquidity coins. People see that the price of the token is rising and buy it.
Walls in a glass Market makers can influence the behavior of even experienced traders, they are such masterminds. A large buy wall signals that the price will not go down, so people are buying up the asset. Conversely, a large sell wall indicates that growth is limited and they are not trying to buy the asset.
Hunt for stop orders Market makers see where stop orders are. They deliberately drop the price to this zone in order to gain liquidity and then turn the market around again.
