I've been watching GDAX for several months and I see repeating offers to sell 64 + bitcoins (not 65 or 63). This seems very strange as it's an unusually large quantity and is repeated several times a day. Can anyone make a quess as to why this would be happening?

  • It is interesting. Once when I was writing a automated trading strategy with their java script API, in implementing the real time order book I made a mistake when entering orders to buy btc for USD price higher than any existing open orders. So if someone made a limit order to buy x btc at say 500k USD it would incorrectly enter it into the order book, corrupting it. Outside of that it tracked well, but every hour or two it would get corrupted. After difficult debugging I realized what caused it and noticed that it would always happen every hour or so. Why would someone do that I don't know. Oct 7 '17 at 10:44
  • Also after devising an algorithm based on a few assumptions, that average rate and volume of market orders would remain relatively constant in near term, I used existing open orders to measure what the "erosion" into the order book should be, and based strategy on that. I noticed that while it would work to some satisfaction ( though not profitable and still random due to random outlier market orders ) other bots which traded fast, were very sensitive to my boys transactions. I experienced competition to have my limit orders competitive (make position changes in roughly 4 minutes). Oct 7 '17 at 10:52
  • I also experienced what seemed to be collusion. That is, with in short time of trading like several hours my bot not only would be detected but large volume of limit orders would go up to draw me in to a btc buy position, then pulled dropping the price significantly and losing money quickly. Also after china ban on ico when btc and ltc dropped about a month ago, I noticed in gdax websocket feed that it seemed to come mostly from closing of buy limit orders and not actual selling of btc. That is the significant change in btc price was mainly due to large cancelation of orders, not the selling. Oct 7 '17 at 10:59

After continous monitoring I've determined it's someone spoofing (attempting to drive the price lower). The bid always starts out $3-$5 out from the current price and as it gets close to the bid it's offer changed a few dollars higher but is never allowed to meet the current price. Interesting.....

  • As far as I can tell there is nothing against canceling orders as long as they aren't spamming the server. Basically there is no regulations for btc trade that I know of outside of exchanges protecting their servers. Oct 7 '17 at 11:28
  • you mean ask, not bid? But anyway, this might not be manipulation. It could be some liquidity providing strategy based on spread, when he waits for some big market orders to move price above the average (and then arbitrage will bring the price back, but he sells with a little profit).
    – Tomas
    Sep 5 '18 at 18:22

If you have a lot of purchasing power (relative ) it is possible to manipulate the price. Say you wanted to sell btc. You could put up limit orders to buy btc at the highest price possible, every time a market order to buy btc comes in it will match with the lowest open sell limit order until it buys up the size it was for and is instant. So if you saw that market order come in and it uses up all the lowest price sell limit orders and there is remaining size left, it goes up to the next lowest order and begins matching with that one. This opens it up to now place a buy limit order at the same price of what that sell order was.

If you have the capital to spend, the price goes up and up. Now most of your orders don't actually have to complete they are just place holders grabbing spots when available. You can probably get more complex to guard against your buy limit orders actually completing, and if they do well your driving the price up so you can sell at a higher price just detect possible ponzi scheme environment where you have to buy more btc than you can sustain and sell in driving upwards.

This is what actually is driving btc price I'm willing to bet most times. Some of the problems which make this possible I think is gdaxs slowness to add or remove btc and fiat. This creates inter market boundaries which greatly reduces the capital necessary to influence the market. With out these boundaries, people would make the markets as efficient as possible. They would take advantage of local market price differences and be able to have profitable arbitrage position. And this controlling the btc price would require large enough capital investments to drive all btc prices up and in the mean time people profit in matching those markets.

Also the markets units of time in my opinion are the market orders. The extent to which the market can be persuaded and how long it takes is determined by market cap and volume traded. This is less susceptible to manipulation because there are fees for market orders.

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