In financial markets, dump and pump strategies are used for manipulation, forcing traders to play by someone else's rules. Let's figure out how these mechanisms affect the market and how to protect yourself from them.

🚀 What is a pump?
A pump is an artificial increase in the price of shares or cryptocurrencies. A group of investors begins to buy the asset en masse, creating the appearance of growing demand. This triggers a wave of buying, attracting investors and causing prices to soar. But such growth cannot continue forever...

💣 What is a dump?
A dump occurs when the price of an asset reaches a peak and manipulators begin to sell assets. This causes a massive sale, driving prices down sharply. Those who did not manage to sell are left with large losses.

🛠️ Mechanism of action
Dumps and pumps are often organized through closed groups on social networks and forums. Participants use fake news and insider information to manipulate perceptions and asset prices. The goal is to create price fluctuations to get rich quick.

💔 Consequences of manipulation
The consequences can be devastating: they undermine confidence in the market, increase volatility and may lead to regulatory investigations. Manipulation can affect both small tokens and cryptocurrencies with a capitalization of more than $1 billion. Unprepared investors lose money, which affects market stability.

🛡️ How to protect yourself
The best defense is education and critical thinking. Don't follow the crowd and do your own research before investing. The strategy of equal spot investments significantly reduces the risks associated with pumps and dumps.

Do not invest in little-known tokens that show growth of 10% or more without a news background in a stable market - in 99% of cases there are manipulators at work there.

Be vigilant, conduct independent analysis and do not allow manipulators to control your financial decisions.

#binance