What are the common signs of a pump-and-dump scheme in the crypto market?

3 answers

• Mykola DotsenkoOct 29, 2023 · 2 years ago
  One common sign of a pump-and-dump scheme in the crypto market is sudden and significant price increases followed by equally rapid price drops. This can be a result of coordinated efforts by a group of individuals to artificially inflate the price of a particular cryptocurrency and then sell it at a profit. These schemes often involve spreading false information or rumors to attract unsuspecting investors. It's important to be cautious when you see a cryptocurrency experiencing extreme price fluctuations without any clear fundamental reasons behind it.
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• Mannat JainAug 21, 2024 · a year ago
  Another sign of a pump-and-dump scheme is a sudden surge in trading volume accompanied by a sharp increase in social media mentions and online discussions about a particular cryptocurrency. This can indicate that a group of individuals is actively promoting the cryptocurrency to create hype and attract more buyers. However, once the price reaches a certain level, the individuals behind the scheme may start selling their holdings, causing the price to plummet. It's crucial to do thorough research and not get caught up in the hype surrounding a cryptocurrency without understanding its underlying value.
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• Leah PerrottaJun 10, 2024 · a year ago
  As an expert in the crypto market, I can tell you that one of the common signs of a pump-and-dump scheme is the presence of buy walls and sell walls on the order book. These walls are large orders placed at specific price levels to create the illusion of strong demand or supply. In reality, they are often used by manipulators to control the price movement and create artificial market conditions. If you notice unusually large buy or sell orders concentrated at specific price levels, it could be a red flag for a potential pump-and-dump scheme. Always be cautious and analyze the market depth before making any investment decisions.
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