Have you ever lost your money because of FOMO? The price of token X skyrocketed, then suddenly plummeted to the seventh circle of hell 😂
Crypto traders, especially small coin traders (low mcap) must be familiar with this term. Yep, pump and dump! For those of you who are still newbies or just want to dive into the world of crypto, please take a good look. The problem is, if you get caught in a pump and dump action, your snack money can be lost in an instant! Don't you want your money to run out because of this mod? Don't worry, I'll tell you how to avoid it so that your wallet stays safe!
What is Pump and Dump?
Just imagine, there’s a group of bad people collecting a lot of money. They create a new cryptocurrency and then deceive people into buying it. Once the price is extremely high, they immediately sell all their coins. The ones who lose are the small investors who just bought at the peak and become victims. That's really cruel, right?
Why Are New Investors Easily Scammed in Crypto?
The crypto world is like the Wild West of investments. Most people enter crypto to seek wealth, and who wouldn’t want to get rich easily? With a small investment, you can make a fortune (that’s what you want, right? 😂).
But the reality is anyone can create a new coin (whether on the network $BNB , $SOL , $SUI , etc.), then claim to have a cool project to attract new investors (of course the developer and their cronies have already bought in below). In fact, they just want to scam! Therefore, we must be extra careful when investing in crypto.
Signs of Pump and Dump That We Must Know:
New Coin That Suddenly Goes Viral: If there’s a new coin that’s causing a big stir on social media and its price suddenly skyrockets, it’s better to be suspicious first.
Unbelievable Sweet Promises: Be careful of projects that promise things that are too good to be true. For example, claiming to turn your $1 into $100K but with no clear evidence or progress.
Overly Enthusiastic Online Community: If everyone in the community is buzzing about the same coin, it might just be a trap.
Drastic Trading Volume Increase: Usually, before the price goes up, the trading volume of that coin will spike sharply. This is a sign that something is not right.
Anonymous Accounts Constantly Promoting: Be cautious of accounts on social media that suddenly appear and continuously promote certain coins.
How to Avoid Pump and Dump?
Watch Top Traders: Pay attention to the list of top traders on the dapps you use; if there are 5 or more people buying with $0 but selling the coin, you can track their wallet addresses (there’s a possibility it was sent by the developer or maybe another trader). But if there are more than 5 wallets like this, then the coin falls into the red flag category.
Don’t FOMO: Fear of Missing Out (FOMO) often makes us rush into investment decisions. Be patient, don’t buy just because everyone is talking about that coin.
Conduct Thorough Research: Before investing, make sure you’ve gathered all the information about that coin. Read its whitepaper, check the development team, and find out about the project they are working on. If it looks suspicious, it’s better to look for another coin.
Pay Attention to Negative Signals: If you start to suspect a coin, it’s better to just sell it. Don’t be too attached to your money.
Don’t Easily Trust: There are so many influencers claiming to be crypto experts. Don’t immediately believe everything they say. First, find out where their information comes from.
Watch Trading Volume: If the trading volume of a coin suddenly spikes, it could be a sign of pump and dump. Be careful!
Invest According to Your Budget: Don’t let all your money be spent just for crypto investments. Remember, investing is risky!
Use a Secure Crypto Wallet: Store your coins in a trusted crypto wallet with good security.
Conclusion
The point is, investing in crypto requires diligence and caution. Don’t let us become victims of fraud. Stay alert and don’t easily be tempted by promises of quick profits.
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