The trend of this summer is to do a reckless thing like selling a house or staking all the lifetime savings on Doge in hopes of getting filthy rich. Does it always work out? Big NO. What makes people do these things is a wave of rapid price rise otherwise known as PUMP. We’ve got a comprehensive how to crypto pump and dump guide here.
There are three distinguishable stages of the rise.
FOMO stands for “Fear Of Missing Out”. It is when you notice a slight growth and suspect that if you don’t buy right now, an asset will become more expensive in a day—in an hour, even—so you deem it reasonable to buy right now. Otherwise, you’d miss some good profits.
PUMP goes in when a lot of FOMO buyers have flooded the market making the price curve bend upwards unnaturally. Its core difference from FOMO though is that a celebrity or an “expert trader” throws overly optimistic crypto price predictions left and right. One gotta be really cynical to do that to people.
This is how to spot pump and dump crypto. If someone famous promises x10 for any coin in the next hour, you know that something is definitely not right. It is neither naive wishful thinking nor some insider insight on their part, it is a blatant manipulation. So yeah, if you partake in the pump and don’t sell out in time, a humiliating golden shower is what you get.
Remember we wrote about bitcoin price predictions back in April? We have selected the sources that were careful in their judgments, and their guess was, on average, that Bitcoin will hit $100,000 if not by the end of 2021 then sometime in early 2022.
There were the other type of predictors who expressed a pretty confident guess that BTC will hit $150,000, $300,000, or $500,000 by the end of the summer. They were very much pleased that people believed their guesses and rushed to buy. As usual, it was not financial advice, so no one would care if you lost your house.
PUMP does not denote the peak of the price rally: meet LAMBO and MOON. The price spike has broken through all the moving averages and humble expectations, literally allowing some holders to afford the luxurious car. But all of the market participants realize that this cannot last forever: FUD, REKT, and FUKT stages follow up next. You detect them by a downward facing median price curve.
How to find a crypto pump and dump group
We will avoid posting any links because it is not unheard of that scammers post random signals and drive people to buy or sell. What is their motif? Earning affiliate fees with brokers, of course. The principle is very simple: if a random signal results in profits for the group members, the group owner highlights their testimonials, otherwise they delete them. It eventually builds up a “trustworthy” profile, and the newcomers think that participating in the scheme is profitable overall.
If you still want more specific data on how to find crypto pump and dump groups, here is a direction to look: type in the keywords “pump and dump” or “crypto signals” in Telegram or Discord.
What we suggest instead is learning the basics of technical analysis.
How to avoid crypto pump and dump
Crypto traders do not particularly enjoy the stages of the fall: getting REKT does not sound pleasant at all.
If you are among the ones who would rather stay away from drama, here is a couple of possible ways how to avoid crypto pump and dump:
Ignore the pump. Here is an example. Bitcoin traded for $30K at the start of 2021 and showcased a steady growth right until April. Then it started to decline from the point of about $64,000 per coin. It does not matter where between January and April one decided to buy BTC. Bitcoin has a tendency to increase the price 6-7 times respective to its previous low, so the next high should strike $180,000 in a year or two.
Convert to stablecoins. Suspecting the upcoming dump, sell a part of your digital assets for Tether or another suitable coin. Not many people trade crypto in the midst of a summer, so it is a common move people take in June to spare themselves of all the stress connected to the price rally.
Avoiding volatility is not everyone’s cup of tea. Exploiting it, on the other hand, may leave one with some extra coins and thousands of dollars. We will elaborate on how to get rich on pump and dump crypto right now.
How to get rich on pump and dump crypto
Pump and dump group owners make money because they buy crypto before everyone else in the group and sell it before anyone else as well. The key is to direct people to buy a coin on a particular exchange for a limited duration of time. The running market price will naturally rise if the group is sufficiently big and the market trend is not bearish at the time. When the duration is over, everybody sells and makes whatever profit they can.
Compliment Bitcoin on Twitter and perhaps your following will actually make the overly optimistic price predictions true. In fact, “laser eyes until 100K” flashmob is an example of a failed pump.
The successful pumps are those pulled out by Elon Musk: he keeps pumping Doge to the Moon and occasionally pumps and dumps Bitcoin. Watch and learn.
Learning how to pump and dump crypto automatically makes it easier to recognize such activity. This is where you start to learn how to ride pump and dump crypto even if you were not the one who started it. Analyzing the median price chart would be most helpful in this regard.
Bitcoin price prediction rainbow chart, too, will help you understand what price is above or below the natural average.
This is it! Hope you’ve learned a new thing or two on how to pump and dump crypto. Or protect yourself from it!