Ever wondered how some traders navigate the treacherous waters of pump and dump schemes? While we don't endorse this strategy, understanding it can help you stay vigilant. Here's a closer look:
1️⃣The Gem Hunt:
Market makers look for low market cap, low volume, and low liquidity coins with perpetual listings. Ideally, they target coins with desperate teams or severely devalued prices to buy in at a discount.
2️⃣Cornering the Supply:
To control the game, market makers accumulate a substantial portion of the spot supply. This makes it difficult for others to arbitrage and generally hinders market-making activities due to limited inventory.
3️⃣Pumping the Spot:
Market makers initiate the pump phase, inflating the price through coordinated buying and positive news. The surge in spot prices often spills over to the perpetual futures market.
4️⃣Spot vs. Perpetual Dynamics:
When spot trading significantly surpasses the perpetual contract price, it results in negative funding rates. This makes it challenging for arbitrageurs to capitalize on the price difference.
5️⃣Educational Opportunity:
Inexperienced traders often misinterpret negative funding as an opportunity for a short squeeze. However, it's primarily driven by aggressive spot buying, not perp selling.
6️⃣Tourists Pile In:
As prices rise, traders pile into long positions, expecting a short squeeze that may never come. They also collect funding from being long, adding fuel to the fire.
7️⃣Exploiting the Momentum:
With arbers sidelined due to limited spot inventory and inexperienced traders falling for the short squeeze illusion, market makers trade as fresh longs, squeezing naked shorts with momentum.
8️⃣Cashing In: Once the price has reached its peak, market makers short the perpetual contracts. They then dump their spot holdings, profiting from both the pump and the subsequent dump.
9️⃣Repeat or Not: Market makers may rinse and repeat this cycle. Remember, while understanding this strategy can help you recognize warning signs, it's crucial to prioritize ethical and legal trading practices. Protecting yourself and promoting a safe trading environment should always be the top priorities.
#CryptoTrading #PumpAndDump #MarketMakers #EthicalTrading

Pre-FOMC Meeting Assessment for November: Don't Be Complacent!

With the FOMC meeting this week, the market is currently pricing in the almost certainty that the FED will maintain its benchmark interest rates. The Federal Reserve's futures interest rate tracker from CME is showing a probability of nearly 98% that the FED will not change interest rates. For this reason, many people consider this FOMC meeting to be unimportant. However, that's a mistake. Even though interest rates may not change, the messages for the future need to be closely watched, and the USD, along with related assets, will still bear the brunt of any surprises.

To prepare for this, below are some assessments for the meeting from TD Securities analysts. Let's dive in!
Hawkish Scenario: Probability 20%
This scenario would involve the Federal Reserve temporarily pausing the rate hike and strongly indicating the possibility of additional rate increases before the end of the year. Chairman Jerome Powell emphasizes a strong recovery in Q3 growth, while downplaying the significance of any potential shocks to the broader economy in Q4.
In terms of its impact on the USD index, TD suggests that it could lead to a 0.2% increase in the Bloomberg Dollar Index (BDXY).
Baseline Scenario: Probability 70%
This scenario includes the FED making a decision to pause the tightening, as it did in the previous meeting, with the Federal Open Market Committee signaling the possibility of further rate hikes.
The FOMC will reiterate its commitment to being "patient" in crafting its next policy steps, while emphasizing an increasing dependence on economic data. Analysts at TD also expect Chairman Powell to underscore that while macroeconomic data since the September meeting has been undeniably robust, the Fed may exercise patience in gathering additional necessary data.
In this scenario, the USD may benefit, with an estimated 0.1% increase in BDXY.
Dovish Scenario: Probability 10%
In this scenario, the FED will also pause tightening, but it will come with a message that suggests less need for additional rate hikes due to recent financial tightening conditions (and downward revisions to future interest rate projections via the dot plot compared to September). Chairman Jerome Powell might mention that the best course of action is to be patient because all the tightening policies are still in place, credit supply is continuously shrinking, and upcoming shocks will likely dampen growth in the final quarter of the year.
In this scenario, the USD is believed to face the most significant impact, with TD predicting a potential 0.5% decrease in BDXY.
These are the pre-FOMC meeting assessments for this time, so make sure to consider them when planning your trading strategy!#fomc #fomcmeeting #Fed

The first-ever executive order on artificial intelligence (AI) issued by U.S. President Joe Biden has sparked intense debate and mixed reactions.
On October 31st, the White House officially issued an executive order regarding the development and secure use of artificial intelligence technology, aiming to eliminate potential AI-related threats.

Specifically, the Biden administration is now requiring AI development companies to report to the U.S. government under the Defense Production Act (DPA) if their AI programs pose risks to national security, local economies, or user well-being. Moreover, the order mandates developers to provide solutions to mitigate AI-related harm to workers.
The order emphasizes, "Artificial intelligence holds extraordinary potential, but it also carries significant risks. If used wisely and responsibly, AI can address urgent challenges, making our world more prosperous, productive, innovative, and secure... However, if misused, it can 'wreak havoc' on our world and jeopardize national security."
With this new order, White House Deputy Chief of Staff Bruce Reed describes it as "the strongest action" taken by any government worldwide to ensure cybersecurity.
However, this move has faced significant backlash. CEO of Tusk Ventures, a technology and AI investment fund, expressed concerns that tech companies may not want to share their proprietary AI data with the government due to fears of data leakage and falling into the hands of adversaries.
Not only the tech industry, but many crypto companies have also voiced their discontent. Jeff Amico, former partner at a16z and now CEO of Gensyn Network, criticized the order, saying it is detrimental to U.S. innovation. He highlights that the new rules force new and advanced tech startups to comply and report similarly to large publicly-traded organizations.
Following the issuance of the new order, AI-based tokens such as The Graph (GRT), Fetch.AI's (FET), SingularityNET (AGIX), Ocean Protocol (OCEAN), among others, have seen a decline of 5-10% in the past 24 hours, despite the broader market's recovery.

This executive order marks a significant development in the intersection of AI and crypto, impacting the market and sparking debates within the industry. Stay tuned for more updates. 📈🤯 #AI #Crypto

In a remarkable emergency move, MakerDAO steps in to protect DAI from potential de-pegging.
On October 31st, the USDC reserves of DAI unexpectedly dropped below $60 million. This raised concerns about the stability of the DAI stablecoin as it requires over $200 million in collateral to be considered secure.
Recognizing the urgency of the situation, MakerDAO quickly transferred $250 million from Coinbase Custody to the DAI's Stability Module (PSM). As of now, MakerDAO's Coinbase Custody account holds only $250 million.
*PSM is a collateral asset pool that allows users to mint USDC for DAI at a 1:1 ratio and trade DAI at its dollar peg price. If the PSM reserves run dry, the price of DAI can potentially rise above or fall below $1.

Fortunately, MakerDAO's swift emergency action has prevented DAI from de-pegging. The immediate threat has been partially averted. However, Allan Pedersen, the CEO of DeFi lending firm Monetalis, subsequently made several comments on forums requesting SHRM trustees, who manage the PSM, to support it. Still, SHRM trustees have yet to respond.
It's worth noting that between October 29th and October 31st, over $100 million left the PSM before the emergency assistance from Coinbase Custody arrived. Notably, this money seemed to be heading towards centralized exchanges.
On the Maker forum, Allan Pedersen announced that the project team is working to automate the PSM through smart contracts. However, he mentioned, "Automating PSM is still reliant on delegate signers, administrators, legal structures, and centralized bank/exchange entities, and remains secure and stable for now."

🚀 Exciting News in the Crypto World 🌐📢

Starknet is making headlines with the launch of their Early Community Member Program (ECMP). Here's what you need to know:
🎁 ECMP will airdrop up to 50 million STRK tokens to individuals who:
1️⃣ Contribute significantly to technical discussions.
2️⃣ Participate in crucial ecosystem projects.
3️⃣ Organize Starknet-related events.
4️⃣ Regularly publish Starknet content.
While the token's value cannot be estimated due to its absence in trading, this reward system aims to foster Starknet's growth and community maintenance, especially in the current crypto winter.
To get your hands on STRK tokens, individuals and projects must apply for sponsorship and provide detailed information about their contributions. The registration period ends on 11/19/2023, and the list of recipients will be announced before 12/29/2023.
Here's how individuals meeting the criteria can participate:
📝 Step 1: Visit https://ecmp.starknet.io/ and log in with your Telegram account.
📝 Step 2: Fill in your details, including email, Discord, Twitter, GitHub, and wallet address.
📝 Step 3: Describe your contributions and submit them to the project.

Additionally, you can join Starknet's community at https://community.starknet.io/ and actively engage to increase your chances of receiving a Starknet airdrop slot.
Starknet Foundation, established in November 2022, holds a significant portion of the initial token supply, with 50.1% of the 10 billion STRK tokens. This amounts to approximately 5 billion STRK tokens.
Starknet, currently the sixth-largest Layer 2 blockchain with a total locked value (TVL) of $143 million, is a project to watch in the ever-evolving crypto space.
Stay tuned for more updates and opportunities in the crypto world! 📈🚀 #Starknet #Blockchain #CryptoCommunity