SPOOFING; A MYTH OR REALITY
🧵/1. Finally, one of the well-known figures in the community mentioned "SPOOFING" in order books, mainly done through (or by) @binance. But what's spoofing?
Thanks to @woonomic for pointing out the 🐘 in the room.
🧵/1. Finally, one of the well-known figures in the community mentioned "SPOOFING" in order books, mainly done through (or by) @binance. But what's spoofing?
Thanks to @woonomic for pointing out the 🐘 in the room.
https://twitter.com/woonomic/status/1467075228593684480
🧵/2. Spoofing is a disruptive algorithmic trading activity employed by traders to manipulate markets. In an order-driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe ...
🧵/3. ... that there is pressure to sell (limit orders are posted on the offer side of the book) or to buy the asset with the intent to cancel before the orders are filled. Typical spoofing algorithms are "layering algorithms" and "front-running."
🧵/4. Reading/Watching all these references above, let's look at @Bybit_Official order book for yesterday's price plunging to 42K. The orders are in the size of 1.5-5 M BTC! and most of them were closed before their order get filled up (Look at the low trade volume profile) 
🧵/5. Looking at the @binance spot market, we can see a huge sell order was opened @ 59K (size of 100-300 BTC) just before the price crash and it was kept open through. Remember, the trading robots react to this fake sell pressure.
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