How does market manipulation affect Bitcoin prices?

Market manipulation affects Bitcoin prices by artificially inflating or deflating its value through various tactics. Large-scale traders or groups, often referred to as “whales,” can execute substantial buy or sell orders to create significant price movements. These actions can lead to panic buying or selling among smaller investors, further amplifying price changes.

Techniques like “pump and dump,” where the price is driven up to attract investors and then sold off rapidly, can cause sudden and dramatic price fluctuations. Spoofing, where large orders are placed and then canceled to create false impressions of demand or supply, can also mislead traders and influence market sentiment. These manipulative practices undermine market integrity and contribute to Bitcoin’s volatility.