Spoofing Order Books in the Crypto Market

This article sheds light on a market manipulation strategy known as spoofing – its prevalence, challenges in detection and how it impacts price movements. Spoofing refers to manipulating order books by placing and canceling fake orders. Traders and algorithmic bots that use the structure of order books as a trading indicator to front-run the market are deceived by this activity. They execute genuine trades that drive the market price in the manipulator’s desired direction. The article discusses the complexities and challenges of detecting spoofing in realtime and goes over tools that may be used to flag suspected spoofing activity.