I think that market maker is counting on people following bitstamp as the most reliable and indicative exchange in terms of price. Remember, there is no margin trading on bitstamp and exchange operators are not cooking and manipulating the order books. They applied for bitlicense.
So all the trading the bot is doing back and forth at its own expense is to make other people feel like there is some real demand coming from the real world. I think they are luring more people into buying while the market makers are unloading their highly leveraged bags on other exchanges.
So all the trading the bot is doing back and forth at its own expense is to make other people feel like there is some real demand coming from the real world. I think they are luring more people into buying while the market makers are unloading their highly leveraged bags on other exchanges.
I like that. So, profit neutral bot trading locally, for nonlocal profits.
One problem I can see with this: Creating the impression of buying while unloading yourself, by my impression, is the less common strategy in this market. Much more likely, imo, to see a good old pump (and then, dump, for profit), i.e. start the pump on some good news, paint the book and place some strategic buys, then, when the enthusiasm runs dry, dump before other traders do. Which doesn't fit here (unloading while the trend is still intact)
I guess the strategy here could be the case of a whale who bought massively at the sub-200 bottom, but doesn't plan to hold on to it, unloading slowly now. That what you have in mind, roughly?
Remember, the bot is not buying, just creating an impression of a sudden rise of volume in a place that matters. 98 coins bought and after a minute or two sold even for a 1~2 $ loss. I guess someone used bitstamp's 0 fee promotion in september to pump up the volume for his accounts and get the lowest possible fees this month for that kind of operation.
I for one bought massively at sub 180 at bitfinex. I moved those hefty profits to bitstamp asap. So I wouldn't call that exactly unloading, but distribution. Another round is coming soon.