Spoofing Tactics

Spoofing is a manipulative trading practice where a participant places large, non-bona fide orders in the order book with no intention of executing them. The goal is to create a false impression of supply or demand to trick other market participants into buying or selling at unfavorable prices.

Once the market reacts to the fake order, the spoofer cancels it and executes a trade on the opposite side to profit from the movement. In the cryptocurrency space, this is often automated by bots and is particularly prevalent in less regulated markets.

It is considered a form of market abuse that distorts true price discovery and harms retail liquidity providers. Regulators and exchange surveillance systems actively monitor for these patterns to maintain market integrity.