There is only a single reason why volume is manipulated on exchanges.
The exchange or coin's company want's to showcase they have a lot of supporters (if the price is growing and there are a lot of users buying and selling their tokens, it looks like these fake people are interested in buying their coins).
Usually, it the company of the coin that wants their coin to be washed, and therefore pay a specific fee to the exchange for them to fake the volume - this is usually only possible on smaller exchanges, but there are a lot of large Asian exchanges that also perform in faking trade volumes/market making.
This is a very good explanation of how faking volume usually works.
You see that A buys at 3.2, B selles at 3.201 C buys at 3.2 again, but in reality, the actual legit orders which are placed at 3.19 and 3.21 never get executed. Or far easier they execute with high priority some trades at the same prices when the spread is big enough to not touch the real walls.
Of course, exchanges that have a history of faking volumes have more an more advanced scripts but the basics are still the same.