Are PNUT and BOME 'pump and dump' schemes?
A few days ago, PNUT announced its launch on Coinbase, which temporarily raised its price by over 20 points, but then there was no significant movement, and it began a slow decline. Since the launch of BN spot trading, apart from the initial two days of rapid increase, it has mostly been in a downtrend.
Why do people say PNUT and BOME are 'pump and dump' schemes? The price movements of these two coins are quite similar; they attracted a lot of attention when they first launched, especially after launching on BN, where the market was once heated, but after a surge, it began to weaken.
I believe the main reason they couldn't maintain the upward momentum is that there are too many retail investors in the market, and the main players don't have enough chips to continue pushing the price up. Meanwhile, retail investors are fighting their own battles, making it difficult to provide sufficient funds to support further upward movement, ultimately leading to a continuous decline in price, even creating a feeling of mutual liquidation.
Because these two coins attracted a lot of attention early on, everyone is watching them, and when the pullback occurs, retail investors see it as an opportunity and rush in, but the market turns downward instead.
Of course, I think the presence of too many retail investors in these two coins is still my personal judgment. In the past year of live broadcasts, the most frequently mentioned coin by fans in the first half of the year was BOME, with everyone asking if it still has the chance to surge or if it can trend upwards. In the past month, the most asked about has been PNUT, with people inquiring about the future market trends and how much it can rise.
Therefore, I believe that for these coins to establish a strong trend, they must first 'wash out' the retail investors, allowing them to hand over their chips, or through a prolonged period of horizontal trading to make retail investors lose confidence and voluntarily sell their chips. Only when the main players have enough chips can they drive up the price, and during the upward movement, they won't be easily disturbed by retail investor sell-offs, making it possible for the trend to truly develop.