BTC$65 236.35


ETH$3 483.12




Binance Coin






What Is Spoofing in Crypto Trading?

April 2023

Spoofing is a way to attempt to manipulate the market in your favor. If you spend any time trading, you will eventually hear the term “spoofing.” Spoofing is illegal, at least in most developed markets, but spoof trading does happen. However, with a bit of common sense and patience, you can avoid most of the detrimental effects of spoof trading. 

What Is Spoofing? 

“Spoofing” is a term used in trading that suggests nefarious order flow. Some traders will try to bend the rules to gain an advantage by spoofing, a form of exchange manipulation that, unfortunately, is easier to do in the age of computing. After all, the speed of most transactions can be thought of in nanoseconds at this point. 

Spoofing is a tactic that is sometimes used to change asset prices, be it stocks, bonds, or even cryptocurrencies. Essentially, it is when traders will place a market order, either buying or selling, and then cancel before the order is ever fulfilled.

How Does Spoofing Work, and What is the Point of Spoofing Cryptocurrency?

Spoofing involves placing either long or short-market orders and canceling them before the order is fulfilled. It is the practice of trying to initiate fake orders with no intention of ever seeing them executed. It means that somebody is spamming the market with orders, trying to get other traders to jump in and either buy or sell a security to send the market in that direction.

Example of Spoofing 

Spoofing is a bit difficult in some of the more liquid markets, but you should remember that it happens even there. An example could be as follows: 

Does spoofing always work? 

Not really. It’s a bit of an outdated method, although some algorithms are out there using this as a potential strategy. It takes significant computing power even to attempt this unless you are trying to spoof a tiny market. It’s much more common to see spoofing in these smaller markets than in bigger ones like Bitcoin or currency markets.

How Markets Typically Respond to Spoofing

Markets typically have a bit of a move in the direction of the potential spoof trade, but most often, they will return to normalcy rather quickly. The most effective spoofs are done in thin markets, so in the crypto world, it might be a very specialized crypto market or a market for a relatively new or unknown coin. However, at a much more liquid market such as Bitcoin or a large=cap stock, these moves tend to be very quick and therefore are less profitable than they once were.

Is Spoofing Illegal? 

Spoofing is illegal in some countries, but other countries may still need to categorize it in their legal framework. It was part of the Dodd-Frank Act in the United States, which was signed into law in 2010. It is described as a “disruptive practice” in section 747 of the legislation, straight from the CFTC or US Commodity Futures Trading Commission. 

There are also additional laws from the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Spoofing, in general, is illegal in most developed markets. The SEC fined J.P. Morgan $1 billion in the fall of 2020 after the company was caught conducting spoofing activity in the precious metals market as an example of what can happen.

How to Avoid Getting Spoofed by Spoofers and Market Manipulators in General? 

Computers do spoofing most of the time, and much quicker than you can catch on your own. The best thing that the retail trader can do most of the time is to stick to a trading strategy that works over the longer term. By trying to “front run others,” you are hoping to get involved in the market ahead of them and hope that they will successfully push prices higher or lower. Quite frankly, that is emotional trading without a plan.

Furthermore, if you trade higher time frames, a couple of texts one way or the other will make a massive difference in your account. By keeping your money management solid, you can deal with the occasional bounce in one direction and remain profitable over the longer term.


Spoofing continues to be an issue in most markets, even the developed ones. After all, even J.P. Morgan has been caught multiple times spoofing the bouillon markets and many other large firms. That being said, it’s probably worth noting that the fines these companies pay typically do not cover the amount made. In fact, for some of the big firms, it’s simply a “cost of doing business.” 

That being said, it’s not something that most traders can do. After all, it would help if you had the significant computing power to get in and out of the market quickly, and latency can cause substantial issues. Spoofing is found in any market with a DOM or a list of buy and sell orders accessible for traders, sometimes called “Level II.” You are trying to get other people to follow you or move the market in the direction you wish it to go. However, you have to have a reasonable size to make that happen. If you have a $1000 account, you are not counted as being able to throw enough market orders out there to get the market moving in your direction. 

Because of this, most traders need to focus more on avoiding falling victim to a spoofing move. The reality is that the easiest way to do it is not to scalp the market. In other words, spend a little bit more time in each trade, or focus on a little higher time frames. The little spoofing that goes on here and there will make a slight difference in a two-week move. Furthermore, the trader needs to pay close attention to their trading strategy because jumping in and out of the market based upon a potential spoofing move is trading via emotion and not necessarily a longer-term trading plan that pays over the long term. Remember, consistency will always be more important than just a few ticks here and there. 

FAQ: Frequently Asked Questions

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 74.8% 44 $65 236.35 3.83% 11.07% $1 286 904 144 589 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 76.4% 50 $3 483.12 3.19% 12.82% $418 745 103 273 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 94.8% 1 $1.000616 0.04% 0.05% $113 294 326 133 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 78.8% 43 $579.07 3.20% 11.00% $85 460 275 696 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 80.8% 36 $162.09 5.20% 12.68% $75 238 706 990 SOL 7 days price change
6 XRP (XRP) XRP XRP predictions 77.2% 41 $0.615935 14.09% 40.49% $34 372 438 638 XRP 7 days price change
7 USD Coin (USDC) USDC USD Coin predictions 95.6% 1 $1.000157 0.03% 0.01% $33 991 611 940 USDC 7 days price change
8 Toncoin (TON) TON Toncoin predictions 88.4% 14 $7.27 -1.31% -1.07% $18 273 152 177 TON 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 70.8% 54 $0.125525 4.26% 14.92% $18 220 028 521 DOGE 7 days price change
10 Cardano (ADA) ADA Cardano predictions 78.8% 37 $0.446359 3.82% 16.01% $16 018 056 181 ADA 7 days price change
11 TRON (TRX) TRX TRON predictions 74.8% 44 $0.134539 0.93% 3.58% $11 719 593 309 TRX 7 days price change
12 SHIBA INU (SHIB) SHIB SHIBA INU predictions 80.8% 36 $0.000019 3.17% 15.78% $11 356 605 188 SHIB 7 days price change
13 Avalanche (AVAX) AVAX Avalanche predictions 78% 42 $28.72 6.68% 7.40% $11 336 759 087 AVAX 7 days price change
14 Lido stETH (STETH) STETH Lido stETH predictions 94.4% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
15 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 92% 1 $0.116354 -0.46% 0.23% $10 171 995 609 WTRX 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2024

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.