So I have been watching what I can only assume is a Whale bot playing out in a wave stabilization scheme on the order books of my exchange of choice. It's been fascinating, exhilarating, revolting, scary as fuck, and any number of other adjectives and descriptive phrases...
His MO is that he chooses a time when the market is relatively stable in a sidewardly mood. He places 50 BTC buy order at say 34,501.01 and another 50 BTC Sell order at 34,999.99. In a low volume time on the exchange this creates a set of walls in a $500 range. He then sets a Sell order of 10 BTC at market (let's say $34,601.01) and immediately places a buy order at $34,549.99. Now what makes me think it's a bot and not just a high-roller daytrader is the fact that every order being filled is immediately followed by an order being placed. And if the price bounces off of the 50BTC walls, it ends up creating an additional set of 10BTC bouncing orders that follow the same $50 spread pattern simultaneously with the first. At first, my thought was "why would he be executing these buys and sells at just a $50 spread?" Bit then I did the math, and watched. Every pair of buys and sells gets him $500 profit. And over a period of time, the algorithm actually seems to capture the market causing a very smooth sideways motion with very little variances outside of the $50 ping pong ball bounce. Over a period of 2.5 hrs Thursday evening, I counted 56 trade pairs, and I'm quite certain I didn't catch them all. So if we round that out to 50 trades at $500 each, that's $25,000 profit in 2.5 hours!
(Not bad in most people's perception) So I was really marveling at this and thinking "Well, Damnit! The game is rigged! If you've got enough cheese to trap the mice, you can't lose!"
Of course, that immediately led to the thought, "As a freezer burned leftover popcorn shrimp, what chance do I have of EVER accumulating THAT kind of volume!?!"
And then tonight, I saw the Bot get toasted. (I know, it'll probably all work out in his favor in the end, but let me laugh for a minute!)
I noted that the market had started to really smooth out in a sidewardly motion with a very slight Downward lean, so I started skimming through the order book, and there it was, a Buy Order for 50BTC at $34,501.01. And as I watched, the Red Candle suddenly started growing, and it went from $34,545 quickly down to $34,501 and as I watched the 50BTC buy got chewed away in seconds and the price continued down to $34,443. At this point as I scan through the order book, there are 2 50 BTC Sell orders $450 apart, but the price is still $75 below the bottom one. King Daddy escaped from the trap and not sure the Whale is even paying attention to cancel the bottom order and try to get the price back into the walls. Obviously the bot was not designed with contingency to do so automatically. 😕😟☹😲😵
-Cope
I've noticed similar trading patterns, overall the BTC trading appears "artificial" on a large scale (compared to several years ago). However, a mistake I've done several times observing this is that sometimes one big whale turns out to be many traders after further analysis reacting in similar manner using the same software (potentially bots), also sharing mindset and info.
In other news, looks like the heat is turning up on Binance, getting the MTGOX vibe, so I moved the BTC back to wallet for now.
