Author: Fairy, ChainCatcher

Editor: TB, ChainCatcher

A covert and efficient trading game unfolded over the weekend.

In just a few weeks, an unknown entity accumulated over 20% of the total supply of AUCTION, driving trading volume to soar, open interest to grow, and CVD to continue rising. Everything seemed to indicate a strong bullish market. However, behind the scenes, the "whales" were quietly and precisely offloading their positions.

The token price exhibited a "Christmas tree" pattern, seemingly climbing steadily, but in reality, it concealed hidden dangers. What kind of trading strategy is at play here? How did the "whales" manage to offload large amounts under the guise of a "bullish market"? This article will delve into the truth behind this trading strategy.

AUCTION Market Anomaly: Whale Trading Trajectory Emerges

AUCTION is the governance token of Bounce Brand, which is a decentralized auction platform that integrates liquidity mining, decentralized governance, and staking mechanisms.

Last night, Bounce Brand issued a statement clarifying that the team did not participate in AUCTION price manipulation and disclosed a series of market anomalies:

• Over the past few weeks, an unknown entity has accumulated more than 20% of the total supply of AUCTION.
• AUCTION trading volume surged significantly on major exchanges, with AUCTION futures trading pairs on Binance becoming the third largest trading pair after BTC and ETH. AUCTION spot trading volume on Upbit has surpassed BTC for several consecutive days.
• AUCTION trading prices on Upbit showed significant premiums, with large amounts of AUCTION being withdrawn from mainstream exchanges for arbitrage trading.

Additionally, market liquidity has shown significant imbalance, presenting a series of unhealthy conditions:

• Binance's hot wallet holdings have plummeted, now accounting for less than 10% of the total supply of AUCTION.
• Lending rates have annualized over 80%, with funding rates remaining at -2% across multiple periods.
• Major exchanges have adjusted position limits and risk control measures for AUCTION perpetual contracts.

Based on monitoring data from Yujin, we have compiled the key operational trajectories and price changes of AUCTION whales recently:

From the series of fund movements and market anomalies, it is evident that the price trend of AUCTION is not simply driven by funds; there is a more complex trading strategy at play.

Covert Offloading Technique: "Passive Sell Order" Trading Strategy

During the sharp decline of AUCTION, market data presented a seemingly contradictory signal: CVD (Cumulative Volume Delta) continued to rise, funding rates kept increasing, and open interest was also on the rise. According to conventional logic, when CVD rises and open interest increases, it usually indicates a large influx of active buy orders, and prices should rise. However, the price of AUCTION continued to fall, showing a clear market divergence.

According to analysis by crypto KOL Biupa-TZC, the "whales" of AUCTION employed a highly covert "passive sell order" offloading strategy, completing large-scale offloading in a seemingly bullish market.

1.* Placing Large Passive Sell Orders*

The "whales" continuously placed extremely large passive sell orders near the market price, allowing active buy orders to hit and execute.

Since the spot market is primarily controlled by the "whales," there are almost no active sell orders in the market. The calculation of CVD is based on the volume of active buy orders minus the volume of active sell orders. In the absence of active sell orders, CVD continues to rise, but prices remain under pressure.

2.** Creating the Illusion of "Price Strength"**

The "whales" avoided actively crashing the market, instead making it appear that there were only buy orders, creating a false impression of a rising market for investors.

As CVD continued to rise and open interest increased, retail investors mistakenly believed that funds were actively flowing in, leading them to potentially go long or buy the dip.

3. Gradually Absorbing Market Buy Orders to Complete Offloading

The "whales" continuously placed new passive sell orders, consuming the active buy orders one by one.

Whenever active buy orders hit the passive sell orders, a brief liquidity vacuum would occur in the market, prompting the "whales" to adjust their sell orders downward, causing prices to gradually decline.

Due to the large trading volume, these sell orders were not merely price suppression but were genuinely selling, ultimately leading to a sharp drop in AUCTION prices.

Trading Game Concludes, Market Alarm Sounds

The dramatic rise and fall of AUCTION was the result of the "whales" meticulously orchestrating fund allocation and trading strategies. Although Bounce Brand has provided liquidity support on multiple exchanges to stabilize market liquidity and locked approximately 1.5 million AUCTION, this incident still exposed the hidden risks and complexities within the crypto market.

For ordinary investors, this serves as a profound lesson: in the face of high-volatility assets, blindly trading based on signals will only make one a pawn for the "whales." Only by remaining vigilant and deeply analyzing market dynamics can one stand firm in the ever-changing trading arena.

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