Wash trading is when the same person or group trades with itself - buying and selling the same asset back and forth - to create the look of activity. No ownership really changes. The goal is to inflate volume, attract attention, or make a market look deeper than it is.
It matters because volume is one of the first numbers people use to judge whether a coin is healthy and whether they will be able to sell later. Fake volume lies about exactly that. Cross-check it: does the volume match the depth of the order book? Is it spread across venues or concentrated in one? Volume without liquidity is a stage set, not a market.
๐ฌ How do you judge whether a coin's trading volume is real?
Binance Academy covers this in more depth: https://www.binance.com/en/academy/glossary/wash-trading
Next lesson: A burner wallet for the things you don't fully trust
Trading crypto from Dubai since 2019.
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