Yes manipulation is a problem.

Simply put, these patterns are caused by bots, commonly referred to as 'Momentum Ignition algorithms'.

These are 'high frequency' trading bots which manipulate price action by keeping volatility low in a certain channel, whilst gauging (among other factors) buy/sell interest on very low timeframes (when certain conditions are met).

Based on this buy/sell interest, they will basically decide which direction will yield the most liquidation/stop-outs, since stops by their very nature cause a cascading effect as you go through differing price levels - hence the term 'momentum ignition'.

So, the bots take a position & then ignite (quickly move in the opposite direction) into a certain area, commonly referred to as a 'liquidity pool', where traders place many of their stops. Manipulating the price into one of these pools creates more movement/momentum in favour of the bot position & is therefore more profit.

The reason they are able to accomplish this and be profitable is because

1. They are deployed by larger, more institutional players with large capital accounts

2. Even if they are deployed by separate entities, they are programmed to recognise one another & work together

As an illustrative example, If you take note of the chart below circled in red, you can see the green lightsaber make a move up (1).

Ignoring that move for now, what occurs at (2) is one of these low volatility/volume channels. The bots induce this channel to gather as much info as possible about the price action.

This pattern would commonly be recognized by human traders (us) as a 'bull flag' or 'falling wedge', depending on which timeframe you're looking at. Generally, this pattern indicates that we had a strong move up, and for the most part, the market agrees and is establishing a new floor/support level before moving up once again (bullish).

Throughout this, the bots scrape for information, by 'testing' for levels both above & below the channel (fishing for the greater liquidity pool to thrust through).

If you pay attention to (3) in the middle of the move, you can see a clear break (wick below). This is like a small taste-test, which tells the bots they should work toward taking a short position & violently thrust down, because mathematically it's the most profitable right now (i.e. can liquidate the most number of people).

So what happens?

A) Human traders go long here at e.g $7,500, with various stops just below, anticipating a break out.

B) Breakout traders also set orders to go long if certain resistance levels are broken (for example, if 7,550-7,600 is broken - 'we're going to 7.8k bro, then i'll short it').

The bots then allow the upper boundary of the channel to lift (notice the long wick next to pt. 4) which opens more longs & essentially also traps the break-out traders, who, guess what? also add to the stops the bots are looking to demolish below 7,500).

Queue the cascading effect (BHAAANG) at pt.5 & bart is born.

This isn't people panic selling because they're scared of a $50 drop, this is pure algorithmic manipulation, which is designed to maximise profitability by trapping/screwing the most amount of people/positions when certain conditions are met.

Also keep in mind, I used shorter timeframes to keep this example as simple as possible, but the principles behind this (stop hunting to clear areas & fill positions) still applies when going between larger zones & time frames like 8.8-7.8k etc. Whether it be a bot or human whales, or both.

As for the higher time frame & overall trends, the bots definitely play a part, but they are just one of a few players at the table. Even they have their limitations & are programmed to not fight the over-arching sentiment, when there is conclusive strength.

Clearly as has been discussed at length, there just isn't much right now, and until there is a strong enough reason for absolute retail FOMO, a set of market mechanics/participants will aid in this to suppress & accumulate, before the next real mark up begins.

Always keep in mind, whether it's about learning, gem hunting, or rebalancing your portfolio, the serious players are MOST interested when the market seems boring and appears to be bleak (even though it is against your emotional inclination). It's the retail who are disinterested and only start to pay attention when the big boys own enough to tell them they should.

Which one would you like to be?