The process has names and surnames, gangs of criminals.
Shoeb Bin
Jan 11
Bearish
Understanding Bitcoin Pump and Dump: What You Need to Know
Bitcoin's price can experience extreme fluctuations, often due to pump and dump schemes. These schemes involve a group of traders artificially inflating the price of Bitcoin (the pump) before selling off their holdings, causing the price to crash (the dump). This process manipulates the market for short-term profit, leaving other investors vulnerable to significant losses.
A Bitcoin pump typically occurs when large traders, or "whales," make massive buys, creating a surge in price. As the price rises, more traders rush in, driven by fear of missing out (FOMO). However, once the whales offload their Bitcoin, the price rapidly falls, triggering a dump.
While these schemes can be enticing due to the potential for quick profits, they come with high risks. Many traders fail to time their buys and sells correctly, resulting in heavy losses. To protect yourself, consider diversifying investments, setting stop-losses, and sticking to long-term strategies. Always be cautious of social media hype and sudden price spikes, as these may be signs of a pump and dump in progress.
Understanding the dynamics behind Bitcoin's price movements and staying informed can help you avoid falling victim to such schemes.
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