THECRYPTO.WATCH – Pump and dump (buy and sell) cycle is a general term that occurs in the cryptocurrency world. This term refers to conditions that make the market less stable. In an analysis conducted by two British analysts, the practice of buying and selling is often done.
Pump and Dump: Understanding and How to Overcome Them
According to various sources, the pump can be analogized as a purchase. Meanwhile, dump is a sales activity. However, technically this activity is a cycle of price spikes in crypto assets. Which was followed by a significant decline in value.
The reason is that many large traders make large purchases. This will cause pump activity. Furthermore, it can be predicted that market conditions will be unstable. Because everyone is flocked to buy coins.
On the other hand, when market conditions are chaotic, traders do the opposite. That is a dump on the coins. As a result, the price will drop suddenly. The thing is that the most losses will be experienced by investors and traders, who buy in minimal quantities.