Crypto Dump Is Down, Here's the Full Explanation!

Crypto dumps are essential if you are in the trading business Bitcoins or Altcoins. Especially if you are just starting out as a trader in cryptocurrencies.

Dump crypto is an important thing that you need to know as a youth. Pump and dump is a "game" or scenario that is often used by big traders in the world. Of course, this is very detrimental to you when you buy at the top and suddenly the crypto dumps badly.

Crypto Dump Is A Market Panic

Pump means buy, dump crypto means sell. Technically, this activity is a cyclical increase in the price of a cryptocurrency followed by a sharp decrease in its value. This happens because wholesalers buy lots of coins and increase their activity.

When market conditions become unstable as everyone competes for coins, traders discard coins and their prices drop sharply. The biggest losses are usually felt by traders or investors who buy coins in small quantities.

This cycle occurs very quickly, sometimes within minutes. So you can imagine how big the loss is for small traders and investors. To overcome this, many cryptocurrency experts have investigated and analyzed this pump and dump phenomenon.

How Crypto Dumps Work

Now that we've seen what a dump is, let's talk about how it works. There are several roles in Pump and Dump: Caretaker and Dealer. The job of a collector is to buy crypto assets when their prices fall.

This activity lasts for several days or weeks. The amount of coins collected once is quite large. Hodler circulated in several chat rooms, stating that the price of coins collected increased.

The shortage of Hodler coins in the market actually increases the price of the coins. As a rule, beginners and owners of small capital are attracted by such rarities, and therefore are also interested in buying coins.

Also read: How to Buy Crypto on the Exchange Application, Note This!

Once a coin is deemed to have the highest value, players begin role-playing by gradually selling the coins they get from Hodler. At this point the dump process is executed. When a player folds, market conditions start to fluctuate.

Coins, which used to be scarce, became easier to obtain, and their prices continued to decrease. When sellers panic, the price of the coin drops significantly. As a result, those who lack capital suffer losses. By the way, players with large capital enjoy several advantages.

Before jumping into the crypto market, make sure you understand all the risks, including understanding what pump and dump is. Don't panic when something happens in the market. 

Also read: How to Play Crypto for Beginners, Note This!

Investing in crypto assets is a high risk investment. VCGamers is not responsible for any losses, indirect or consequential resulting from any investment/transaction. Please invest wisely.