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What Is the Risk of “Wash Trading” in Low-Liquidity Altcoin Markets?

Wash trading artificially inflates volume, misleading investors about an altcoin's true demand and liquidity.
Greeks.Live31.10.25

What Is the Risk of “Wash Trading” in Low-Liquidity Altcoin Markets?

Wash trading is a manipulative practice where a trader simultaneously buys and sells the same asset to create a misleading appearance of high trading volume and demand. This is easier to execute in low-liquidity altcoin markets due to less scrutiny and lower trading costs.

The risk is that investors are fooled into thinking the asset is more popular or liquid than it truly is, leading to poor investment decisions based on false metrics.

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