Cryptocurrency exchanges are facing allegations of price manipulation by offloading assets through Wintermute. Analyst MartyParty indicates that top exchanges like Coinbase and Binance aim to liquidate leveraged long positions, with a strategy that may lead to significant price fluctuations.
Market makers benefit from increased trading fees and asset accumulation. The created short squeeze threatens traders who short-sell after price drops, as they may be forced to buy back assets, leading to further price increases.
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