Cryptocurrency trading has exploded in popularity, but with rapid growth comes a surge of unregulated platforms—many of which manipulate data to appear more active than they truly are. As investors and traders rely on exchange rankings to make decisions, understanding how volume is faked becomes essential for avoiding misleading information. This article dives deep into the hidden world of volume manipulation in crypto exchanges, why popular rankings can be deceptive, and what real metrics you should focus on instead.
The Myth of Exchange Rankings
In the largely unregulated world of cryptocurrency, anyone can launch an exchange. With thousands of platforms competing for attention, data aggregators like CoinMarketCap and non-official Chinese platforms rank exchanges based on 30-day trading volume. These rankings heavily influence user trust and investment decisions.
There’s even a widely accepted notion of the so-called “Nine Major Exchanges”, including well-known names like:
- Binance
- Huobi
- OKX
- Coinbase
- Poloniex
- BitMEX
- Bittrex
- Bitfinex
- Upbit
These platforms have earned reputations for strong liquidity, security, and consistent user activity over time.
However, if you’ve recently checked global exchange rankings, you might have noticed unfamiliar names dominating the top spots—exchanges like BitMax (not BitMEX), Bit-Z, and others with little to no public presence.
👉 Discover how leading platforms maintain genuine trading activity—check real-time data here.
For example, as of mid-2019, BitMax reportedly had three times the trading volume of OKX—one of the industry giants. But here’s the catch: when you look at their social media presence, these top-ranked exchanges often have shockingly low engagement. Bit-Z, ranked #10 at the time, had only 134 followers on Twitter—a stark contrast to Binance’s massive following.
Similarly, website traffic analytics from SimilarWeb showed that major exchanges like Binance ranked significantly higher globally compared to these obscure platforms. So why do they appear at the top of volume-based leaderboards?
The answer: fake trading volume.
Why Fake Volume Matters
High trading volume signals market confidence. It suggests strong liquidity, active traders, and reliable price discovery. For new users researching where to trade, high volume rankings act as a shortcut for trustworthiness.
But because volume can be artificially inflated, this metric is easily gamed. Both exchanges and project teams have strong incentives to boost their numbers:
- Exchanges want visibility on ranking sites to attract deposits and users.
- Token projects inflate volume to create the illusion of demand and momentum.
And unlike traditional financial markets, there's no regulatory oversight in most crypto markets—making it easy for bad actors to fabricate data without consequence.
How Trading Volume Is Faked: A Real-World Example
Let’s walk through a common method used to generate fake volume—one that’s not just theoretical but has been implemented in live markets.
Imagine a low-liquidity token like VALOR, trading with a wide spread:
- Sell price (ask): 4.147 CNY
- Buy price (bid): 4.050 CNY
A manipulator controls both sides of the trade. They:
- Place a sell limit order at 4.10 CNY—between bid and ask.
- Immediately place a buy market order to fill their own sell order.
- The trade executes, increasing reported volume.
- Their total holdings remain unchanged—only a small fee is paid.
This process repeats endlessly via automated scripts running 24/7. Since the trader controls both ends, no real market risk is involved.
Even better (from the cheater’s perspective), if the bid/ask prices shift, the bot adjusts the fake order accordingly—always staying within range and ensuring self-execution before any real trader can intervene.
If the exchange itself runs this scheme, costs vanish entirely—fees are just internal transfers.
Telltale Signs of Fake Volume
Poorly disguised bots leave digital fingerprints. Consider this 2-hour candlestick chart from a prominent exchange’s LTC/BTC pair:
Notice the perfectly regular spikes in volume under the red box? That’s not organic trading behavior—it’s code running on a loop.
Such patterns are red flags:
- Volume surges occur at fixed intervals.
- Price movement doesn’t correlate with volume spikes.
- Order book depth remains shallow despite high volume claims.
These inconsistencies reveal mechanical trading, not genuine user activity.
The Deeper Problem: API Data Manipulation
Even more concerning than self-trading is direct API tampering.
Most reputable exchanges provide public APIs for developers and data aggregators. For instance, OKX offers an endpoint like:
https://www.okx.com/join/BLOCKSTARapi/spot/v3/instruments/BTC-USDT/tickerWhen accessed, this returns real-time data—including 24-hour trading volume—for the BTC/USDT pair. Aggregators like CoinMarketCap pull data directly from such endpoints to power their rankings.
Under normal circumstances, this system works transparently. But in an unregulated space, some exchanges alter what their API reports.
They might:
- Inflate 24-hour volume by 10x or 100x.
- Report synthetic trades as real.
- Exclude wash-trade detection logic.
Since CoinMarketCap typically accepts API data at face value, manipulated figures flow directly into public rankings—distorting reality.
👉 See how transparent APIs support fair and accurate market data—explore live feeds now.
Why Volume Alone Is Not Enough
Relying solely on trading volume to judge an exchange’s health is dangerously misleading. Fake volume undermines the integrity of all volume-based metrics.
So what should you use instead?
In the next part of this series, we’ll explore two powerful alternative indicators:
- Bid-ask spread ratio (spread rate)
- Order book depth
These metrics are much harder to fake and provide clearer insights into actual market liquidity and user participation—even helping determine which of the "Big Nine" exchanges are truly the most active today.
Frequently Asked Questions (FAQ)
Q: Can CoinMarketCap detect fake trading volume?
While CoinMarketCap has introduced measures like "Adjusted Volume" to filter suspicious activity, full detection remains challenging. They depend on exchange-reported API data and lack real-time audit capabilities across all platforms.
Q: Are all small exchanges faking volume?
No—not all do. Some smaller exchanges operate honestly with transparent reporting. However, many struggle with low organic volume and may resort to inflation tactics to compete for visibility.
Q: Is wash trading illegal in crypto?
In regulated markets like stocks or futures, wash trading is illegal. But most cryptocurrency markets operate without oversight, meaning enforcement is rare—even when manipulation is obvious.
Q: How can I check an exchange’s real trading activity?
Look beyond volume:
- Analyze bid-ask spreads.
- Check order book depth.
- Compare social media engagement and web traffic (via tools like SimilarWeb).
- Use blockchain explorers to verify on-chain deposit/withdrawal activity.
Q: Do major exchanges ever fake volume?
While top-tier platforms like Binance, Coinbase, and OKX generally report credible data due to reputation risk, even they have faced scrutiny in the past. That said, their scale and transparency make large-scale fabrication less likely—and easier to detect.
Q: What tools can help me spot fake volume?
Use:
- Candlestick charts with volume overlays (look for unnatural patterns).
- Third-party analytics like Nomics or CoinGecko (which apply volume adjustment models).
- On-chain analysis tools (e.g., Glassnode, Dune Analytics).
By understanding how volume can be manipulated—and learning to identify trustworthy signals—you’ll be far better equipped to navigate the complex world of cryptocurrency trading with confidence. Stay tuned for Part 2, where we reveal how to measure true exchange performance using bid-ask spread and order book depth.