Pump and dump is a mechanism that occurs in the crypto market for many rounds, which is related to spinning the price of coins to make short-term profit. This is a trick of a kind of potter who starts by "pumping" the price or encouraging the price to go up by buying that coin in large quantities. When the desired price is reached, then he will make a trade to cause a "dump" or cause the price to fall quickly, leaving the investors who bought at a high price to stick with coins with a low value.
Pump and Dump warning signs
Investors can observe the signal of Pump and Dump from the following features:
1. Abnormally rapid increase in prices for no reason such as the good news of the project.
2. Advertising promotion in social media and chat groups should be careful, good projects do not have propaganda.
3. Coins without clear information, without a clear development plan, should be careful.
Long-term investment should be used as protection because long-term investment must be accompanied by studying the project in order to reduce the risk. Avoid exaggerated advertising projects and avoid Pump and Dump.