Market Manipulation
Market manipulation is behavior intended to distort prices, mislead participants, or exploit settlement mechanics.
Definition
Market manipulation is behavior intended to distort market signals, create misleading prices, or exploit weak market structure. Manipulation can target thin order books, public perception, or settlement edge cases.
Why it matters
Manipulation harms users and weakens the informational value of prices. It also increases regulatory pressure and can threaten category legitimacy.
Common forms
• Pushing price in thin liquidity markets to create a false signal.
• Coordinated trading to influence headlines or screenshots.
• Attempts to exploit ambiguous outcomes and weak oracle definitions.
Common pitfalls
Trusting one print: A single trade can move price in thin markets.
Ignoring order book context: Always check bid ask spread and depth.