Wow, I just had a look at the (extremely shallow, much moreso than BTC-E) order book of BTCChina and the "volume" (supposed to be x10 that of BTC-E) that it has. It's clear that almost all of it is fake.
Seems like fonzie is right, someone's trying to induce "arbitrage" and buy at other exchanges.
It is called 'speculative arbitrage', but please do not consider volume 'fake' - if it has consequences to you it ain't fake
0% fee volume not backed up by the order book is fake volume. Or inflated volume. Whatever term you prefer.
Their book is razor thin but their volume is crazy (0-fee yes, but still real). When you see market orders in the trade history but not in the book it is because those offers in the book lasted for less than a second. What they are doing now is probably this:
- place huge ask at BTChina
- buy every asks that appear under the wall, buy from everybody that panic there
- transfer those coins to other exchanges and dump them
- price became lower overall
What if somebody shows up at BTChina and try to resist this? Simple. Our trading hero has a lot more on reserve, for defensive purposes, and if the need arise he'll show them the muscles.
