That’s not really surprising! The Crypto-Asset trader Sylvain Ribes investigated into the volumes of most micro-cap cryptocurrencies and discovered that the trading volume is mostly inflated. Ribes utilized a method he named “slippage” to test the order book of each cryptocurrency trading pair.
After selling $50,000 worth of a cryptocurrency, Ribes measured the impact of these trades an the cryptocurrency’s exchange rate on a certain exchange to measure its liquidity. Ribes implemented this method to test the liquidity of cryptocurrencies on OKEx, Bitfinex, Kraken, and GDAX.
In his blog post, Ribes stated that the research has shown how the volumes of OKEx and other cryptocurrency-only exchanges are fabricated and inflated, and that small sell orders can manipulate the order books and prices of cryptocurrencies.
The unpredictable volatility of Crypto-Assets is one of the major risks for traders.. Inflated trading volumes on major cryptocurrency exchanges need to be highlighted and acknowledged, to obtain a better visualization of actual liquidity within the cryptocurrency market. [read more on Cointelegraph]