Major exchanges suspected of a serious overestimation of the auction
More than $3 billion of daily trading volume on the leading cryptocurrency exchanges could be fiction — about this in his blog on Medium writes cryptocurrency trader Sylvain Ribes (Sylvain Ribes). According to him, the main profiteer is OKex, which is considered one of the world's largest exchanges with a daily trading volume of around $1.5 billion (according to CoinMarketCap).
Opening Rebeca was accidental: he wanted to check volatility, watching as selling for $50,000 will affect the price of the selected coin. Instead, he found massive differences in slippage (slippage) between the exchanges, "what can be explained by overestimation of some parameters at 95%".
Slippage is common among traders the term. It means the difference between the price of an asset at a certain time and price that the trader actually paid for it. The difference arises from the fact that the market can change in the time required to request, process and fulfill orders. Imagine that you go to the electronics store to buy the latest audio system. In a large hypermarket kit costs $1500 — it suits you, and you go with him to the cashier. But at the checkout you're told the price is $1600 because the market has changed over the time that you spent on the way to the cash register. If after that you decide that you no longer need the radio, and returned it on the shelf, you could find that the price rose even above or fell below $1500.
The following chart displays the volume as a function of slip on the example of several exchanges. OKex highlighted in green:
Not need to be an expert to see in this chart, the significant deviations. Ribes estimated that trading volumes OKex, at a conservative estimate, fabricated of 92.9%. This statement is confirmed by another picture:
Again, no examination is required to understand the sinusoidal pattern observed at the bottom of the picture is likely to not reflect the natural movement of the market. Ribes calls it "ridiculously obvious and artificial".
Using the same methodology, Ribes found that Huobi, another Chinese exchange, fabricated 81.8% of their trading volumes. Binance also attracted his attention, but he gave this exchange a conservative estimate, noting that the suspicious activity in question the volume of trading he found.
The situation is alarming because evaluation of cryptocurrencies is largely based on provided by these exchanges of data. So, after OKex is more than 30% of the volume of Bitcoin and litecoin Cash — at least so it is alleged.
Ribes warns: he did not consider in their studies the volatility of the data processing time, the dispersion of hidden orders and other indicators, so his rating cannot be called comprehensive, but it is not necessary to deny that something fishy is going on.
If his allegations are true, then traders have a new reason to worry. Cryptocurrency market is far from stable, and the evidence of large scale manipulation is unlikely to improve the situation.