In the crypto market, terms like Dump and Pump are no longer unfamiliar to traders. These are price phenomena that frequently occur, strongly affecting investors’ trading decisions and emotions. In this article, we will further explore the concept of Dump, the difference between Dump and Pump, and the reasons for these phenomena. Find out now with Crypto Trading.
What is Dump in Crypto?
A dump in the Crypto market is the act of massively selling a large amount of cryptocurrency in a short period of time, leading to a sudden decrease in value. The Dump phenomenon is often performed by large investors or groups of investors for the purpose of taking profits or cutting losses.

What is the difference between a Dump and a Pump?
Dump and Pump are two opposite phenomena in the crypto market. While a Dump is when the price drops sharply due to selling pressure, a Pump is when the price suddenly increases due to a large buying volume. Both of these phenomena can be triggered by influencer group trading strategies or market news. Let’s see the difference through the table below:
Characteristic | Dump | Pump |
Purpose | Sell coins massively to profit from price differences | Pump coin prices up to attract investors to buy |
Impact | Sell a large amount of coins | Buy a large amount of coins |
Price action | Coin prices suddenly plummeted | Coin prices increased suddenly |
Predictability | More predictable | Difficult to predict |
Why does the Dump phenomenon occur?
The Dump phenomenon in the Crypto market occurs for the following main reasons:
- Large investors or driving groups can perform a Dump to reduce the price of a cryptocurrency. Then buy it back at a lower price to make a big profit when the price goes up again.
- When there is an accumulation of large amounts of tokens or coins being sold on the market. Usually caused by investors or institutions wanting to exit their positions within a short period of time.
- Large selling could trigger a ripple effect throughout the investment community. Causes concern and motivates more people to sell. Leading to sharp and rapid price reductions.
- Unexpected events such as policy changes, negative project news, or security vulnerabilities can cause sudden price declines.
- Greed and FOMO (Fear of Missing Out). Some investors may enter strongly bullish markets with the desire to make a quick profit. But when prices start to fall, they may sell quickly to avoid losing money.

As a result, the Dump phenomenon is the result of a complex interaction between technical, fundamental, and psychological factors in the Crypto market. Understanding and identifying these factors can help investors reduce risks and manage investments more effectively.
How does FOMO affect Dump and Crypto trading?
FOMO (Fear of Missing Out) has a great influence on Dump and cryptocurrency trading as follows:
- FOMO makes investors afraid of missing out on the opportunity to rapidly increase the price of a cryptocurrency. When the market begins to increase sharply (Pump), FOMO pushes investors to buy without careful consideration. Leading to unsustainable price increases.
- A surge in buying due to FOMO is often accompanied by a large volume of trading. This can cause a sudden increase in trading volume and lead to an unnecessary price fluctuation Dump.
- People participating in a pump market due to FOMO often do not have a clear strategy and cannot set reasonable stop-loss prices. When a Dump happens, they can lose a lot of money due to insufficient skills to manage the risk.
- FOMO can increase Pump cycles and Dump in the cryptocurrency market. Pumps fueled by FOMO are often unsustainable and can lead to strong Dumps afterward.
- When a Dump occurs and prices plummet, FOMO can cause panic in the investment community. Causing people to try to sell to save personal interests.

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What is the scenario that causes Pump to be Dump?
The scenario that causes Pump and Dump is a type of market manipulation strategy. Often applied in the cryptocurrency market and other financial markets. This is a series of planned operations to increase the price (Pump) of an asset (such as a coin or token). Then sell Dump quickly to make a profit.
The scenario that causes Pump and Dump typically includes the following steps:
- Creation: A group or several large investors form a group. Often called the “steer”, to control the price of a certain cryptocurrency.
- Asset selection: They often choose assets with low capitalization and are easily affected by large transactions to create price fluctuations.
- Signaling: These groups will often signal or spread information to the investment community that a cryptocurrency is about to be “Pumped”. Leading to increased interest and buying from retail investors.
- Pump: After there is interest from investors, the group will buy large quantities of the asset, leading to a sharp increase in price.
- Dump: When the price has increased significantly and reached its peak, the group will sell all or a large portion of this asset in a short period of time, causing a sharp decline in price.
Specific examples for Dump and Pump
Consider this example:

Pump stage
On August 18, 2021, the liquidity of a cryptocurrency spiked. Large investors and driving teams began to buy in large volumes. At this stage, retail investors often buy with the belief that prices will continue to rise. The price has increased sharply from 10,000 to 34,000 in just one month.
Discharge phase ( Dump )
When the price was pumped to a reasonable level for the manipulators (34,000), they started selling in large volumes. The price peaked on September 16 and after that, consecutive trading sessions decreased sharply.
Pump and Dump can be profitable if the scalper keeps up with the manipulator’s moves. However, the number of people who succeed in these missions is very small.
Signs to Identify Stages Dump in Crypto
Some Signs to Identify Stages Dump in Crypto:
- Coin prices increase rapidly in a short time. Does not have a solid basis or is based on unreliable news.
- When prices increase suddenly, the trading volume also increases sharply. Because many investors FOMO (fear of missing out) buy.
- The price chart fluctuates strongly in a short time. Shows a large difference between the buying price and the selling price.
- Fake news or negative information about the coin project. Causing investors to panic and sell off, leading to Dump.
- Crypto groups, forums, and KOLs pump coin prices excessively. Create a FOMO effect that causes many people to buy.
- When technical indicators such as RSI and MACD create bearish divergence signals. It may indicate that the uptrend is about to end and there is a high possibility of a bearish reversal.
- A spike in trading volume and a Reversal candlestick pattern on the price chart.
- Monitor the activities of “whales” – investors who hold large amounts of coins. If they start selling, this could be a sign that Dump is about to happen.

Why is a Dump in crypto dangerous?
Dump in crypto is dangerous because:
- Dump often leads to sudden and sharp price drops. Causing huge losses to investors who cannot react in time.
- A dump can create panic, causing many investors to sell off assets.
- Retail investors are often the hardest hit. Because they do not have the ability to manipulate prices and often buy at the top and sell at the bottom.
- Dump increases market (volatility). Makes predicting and making investment decisions more difficult.
Real-life examples of traps Dump and lessons learned
Many analysts believe this is likely the biggest price manipulation of 2024 so far. Observing TRB’s price fluctuations shows that, in just the last two days of 2023, TRB’s price increased by 250%. But after just a few hours on January 1, 2024, the price of TRB dropped by 80%.
Analyze TRB price on 3h frame with EMA34, EMA89, and volume profile. Analyze TRB price on 3h frame with SMA50, SMA200, and volume profile.
According to CoinMarketCap data, TRB’s trading volume on December 31, the day the price peaked at $630, exceeded $1.25 billion. Inside this trading volume is a strong FOMO mentality, but also accompanied by suspicions of price manipulation when TRB increased more than 3 times in just 2 days.

Even though the trading volume on December 31 was so large, it was still only half of the trading volume on January 1. TRB price fell 80% in a few hours and returned to the volume profile area between 120 USD and 215 USD, which is between the SMA50 and SMA200 lines on the 3-hour frame. It is predicted that this amplitude will continue to be the boundary area of TRB price fluctuations in the coming days.
This could be a lesson for other Altcoins if they experience similar sharp increases. From a technical perspective, if any Altcoin exceeds SMA50 and SMA200 on the 3-hour frame too much, it is likely to quickly fall back within the range between these two SMAs.
How to do Dump and Pump altcoin
Implementing Dump and Pumping altcoins is a highly risky trading tactic and is often considered illegal or unethical on many exchanges. However, here is the usual process:
- Altcoin Selection: Target an altcoin with low market capitalization or low liquidity for easy price manipulation.
- Group gathering: There is often a group of investors or organizations working together to create large buying or selling power.
- Pump: The group begins to buy altcoins in large volumes, creating a sudden increase in price. Spread positive information or rumors to stimulate other investors’ fear of missing out (FOMO), causing them to also buy.
- Dump (Discount): When the price has increased to the desired level, the team begins to sell off altcoins in large quantities. The sell-off action created great selling pressure, causing prices to drop sharply and causing panic in the investment community, leading to a sell-off.

Tips to help you “avoid” the Pump and Dump traps for new traders
To avoid falling into the Pump and Dump trap, new traders need to follow these tips:
- Always research altcoins carefully before investing. Read financial reports, evaluate projects, and track price history.
- Don’t get caught up in the FOMO mentality. Always have a clear plan and strategy, don’t invest just because you’re afraid of missing out on opportunities.
- Please verify all information from multiple reliable sources before making an investment decision. Avoid believing in rumors or unsubstantiated information.
- Monitor trading volume. If you see a sudden increase in volume for no apparent reason, be careful because it could be a sign of a Pump and Dump.
- Use limit orders to control buying and selling prices, avoiding being affected by extreme price fluctuations.
- Use technical tools and indicators to analyze price trends. Tools like SMA, EMA, and volume profile can help you spot unusual signs.

How to help you “dominate” groups Dump in crypto and Pump
Although the crypto market is full of opportunities, it also has many potential risks, especially pump-and-dump strategies. To “overcome” these groups and protect yourself, you need to equip yourself with knowledge and take effective prevention measures.
- Do not invest all in coins that are pumping. The safest thing you can do is keep an eye on the coins that are pumping without having to invest all your capital. If you want to participate, you should only use a small portion of the capital.
- Pump & Dump groups often have favorite coins. Easily causes FOMO in the community and drives the market. Please follow and bookmark these coins. Buy when the price is Dump deep and wait, maybe a few days or weeks. Place a ready sell order and when this coin pumps, you will be the first to profit.
- Check coins being pumped using CoinCheckUp’s Pump & Dump tool. Check to see if the coin has pumped strongly or not. If the coin has pumped strongly and built the column too high, you are late. If the coin has been pumped before, there may be signs that it will be pumped again. If the coin has only pumped a little, keep watching.
- Go to CoinCheckUp or CoinMarketCap to see if there is any good news that will help the coin price increase. Are there any signs of a possible buy? If the answer is no, there is a high possibility that the coin is in the pre-pump stage. This is a good opportunity to buy and place sell orders to take profits.

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Effective and safe crypto trading strategies and directions
Crypto trading is the activity of buying and selling cryptocurrencies with the purpose of making a profit. However, the crypto market is highly volatile and carries many potential risks, so to be successful in this field, you need to be equipped with knowledge, and skills and apply effective strategies.
Trading strategies:
- Analyze market trends (up, down, sideways) and make appropriate buy/sell decisions.
- Use technical indicators and price models to predict price fluctuations and provide trading signals.
- Evaluate the real value of the coin project based on potential, technology, development roadmap, etc
- Buy and sell coins in short periods of time to take advantage of small price fluctuations.
- Buy and hold coins for a long time based on belief in the development potential of the project.
Transaction orientation:
- Clear short-term and long-term goals to have appropriate strategies.
- Divide investment capital into small pieces, do not put all capital into one project.
- Use risk management tools such as stop-loss, and take-profit.
- Discipline in implementing strategies, do not trade emotionally.
- Follow the market, update news, and learn more knowledge about crypto.

Conclude
Dump is one of the popular terms in the Crypto world. This is often the result of market manipulation activities or negative factors affecting investor confidence. The trick to help you “avoid” the Pump and Dump traps is to limit buying when the price has increased sharply and has no specific basis. Instead, you should research carefully and choose trading opportunities with a solid foundation. Hopefully, this article has helped you better understand Crypto and how to avoid traps effectively. Please continue to follow Crypto Trading to update many useful investment knowledge.
Frequently asked questions
Is there any way to predict if a cryptocurrency will be Dump?
Predicting a Dump is difficult because it often happens due to unexpected factors. However, technical research and tracking market indicators can help identify potential signals.
How does FOMO (Fear of Missing Out) affect trading decisions during the Dump period?
FOMO can cause investors to buy when prices are already high. Causing more selling pressure when prices begin to fall, contributing to the Dump phenomenon.
Is there a way to deal with the strong volatility caused by the Dump in the Crypto market?
To deal with high volatility caused by Dump, set clear goals and apply smart risk management strategies, such as using stop-loss and diversification.