As far as financial markets are concerned, there will always be individuals and groups who seek ways to make money in slightly shadier ways. The concept known as wash trading is a great example in this regard. While it is the most obvious form of market manipulation, it is also a very common practice in this day and age. Even in the world of cryptocurrencies, it is not hard to detect wash trading activities.
The Inflated Trading Volume
One of the more obvious signs of wash trading is how a specific financial instrument’s trading volume will seemingly skyrocket out of nowhere. It is not unusual for an individual market to be in more demand than the day before, the when wash trading occurs, the volume will be off the charts compared to its previous statistics. In a lot of cases, those volume spikes will either be short-lived, or simply remain in place every single day without missing a beat.
In the cryptocurrency world, this type of behavior is easy to detect. Since coin-tracking sites monitor exchanges’ volume, it is…