Let me share my personal understanding of market manipulation. Take $RED as an example. It saw a 15% surge before listing on Upbit (see Figure 1). This is a clear case of insider trading, which is not disguised. Regardless of this, after the Upbit listing announcement, news trading bots quickly entered the market, driving up the price. After the price stabilized midway through the rise, retail investors began to short sell in large quantities, and the price began to maintain an extreme value of -2%. Here, we need to explain the role of funding rates. There are two major factors that affect funding rates: the premium index, which is the deviation between the contract price and the index price. The index price is a weighted average of multiple exchanges. You can simply understand it as: the premium index is the basis pro max. The second is the long-short ratio, or the ratio of short positions to long positions. Many people believe that in the contract market, a strong enough short position can change the trend of the spot market. In mainstream currencies, this is indeed possible, but the contract market does not directly affect the spot market. Instead, it balances the two sides of the market through the transmission of emotions and the presence of arbitrageurs. For example, if the short position is stronger in the contract market, then spot traders may be prompted to sell their spot goods when they see negative rates. Arbitrageurs can also maintain the price balance on both sides by lending and opening bilateral orders. However, in a manipulated market, the funding rate becomes a weapon for market makers to manipulate the market. Back to $RED In the case of , when the fees appear to be extreme values, the habitual thinking of retail investors is: it has risen too much, I have completed the Upbit Grand Slam, and the good news has landed, so I want to short it. And if you have observed the behavior of this token, you will find that RED has been trading sideways at the bottom for a long time in the past, with sluggish trading volume and poor depth. Before going on Upbit, there was another 15% increase. This is polishing the sickle for harvesting. In the long-term sideways trading at the bottom, the dealer has already collected enough chips to control the market. The tokens that are continuously unlocked and the chips collected in the long-term wash-out have become shackles that the dealer cannot exit, so they urgently need to find enough exit liquidity to complete the profit. After the price has been trading sideways at a high level and the fees have become extremely negative, the air force has accumulated a lot of liquidity. The dealer directly chooses to dump the market and exit at this time. There may be profits, but it is not the best behavior. First of all, the dealer is It is impossible to cash out on a large scale in the spot market, as this will trigger the exchange's risk control and may even lead to community rights protection. Secondly, this is not the optimal exit path, because the dealer holds a large number of chips. He can completely reduce the liquidity of the spot market (because retail investors have almost no chips, they only need to take in a small number of sell orders in the spot market), so that the price remains high for a long time. Then use leverage to open enough long positions with a small amount of margin to make profits by eating the funding rate. The crazy retail investors not only maintain the funding rate, but also trigger Binance's fee settlement mechanism. If the funding rate closes at an extreme -2%, it will be immediately changed to 1 settlement per hour until the rate returns to normal. For the dealer, this is a rare opportunity for large-scale financial management. They have completed the large-scale financial management feat of 2% daily at almost no cost. So after the funding rate returns to normal, will the dealer definitely crash the market? Actually, it is not. As mentioned above, if the dealer wants to exit, it is impossible to sell the goods in a one-time manner. Almost all dealers will choose to sell moderately. So even if they want to sell, they will create the illusion of high trading volume by brushing the volume, or release good news to let retail investors switch from short positions to long positions, and then suppress the price by slowly selling the goods to follow a trend. Of course, there are so many paths that the dealer can choose. He can continue to pull the market to a higher position, make the fees extreme again, and repeatedly harvest the air force. In the secondary market, activity means liquidity. Once the dealer completes the Grand Slam, the token is their cash cow. They have no need to go through a wave and keep selling until the token returns to zero. Continuously releasing good and bad news, constantly washing and controlling the market, and plundering liquidity are the basic operations of a qualified banker. So, don't be self-righteous and say that you can keep up with any operation of the banker. You and I are all leeks. For retail investors, there are only two ways to go: short selling and long selling. For bankers, they can control the K-line trend, the fees, and the order book. It is not a game at all. In fact, there is no need to participate. Of course, not all banks can complete the perfect harvest. The market is always changing. There are often bankers who can't control their chips and make mistakes in operation, but instead give money to the market. Although the secondary market is not as transparent as the primary market, some operations will still leave traces, which requires everyone to be patient and smart to dig.