Understanding pump diagrams and cryptocurrency dumpa
The world of cryptocurrencies has evolved exponentially in recent years, and many people have invested heavy money in this digital asset class. In addition to growth, however, there is a new risk stock that makes investors feel exposed and misleading. Two of these risks are the diagram of pumps and drops – the fraudulent tactic that is artificially overestimated at the price of the cryptocurrency, just to sell it at an overvalued value.
What is the pump and dump system?
A pump and dump diagram is a kind of market manipulation in which a group of people forces the cryptocurrency price to be artificial overestimation, often coordinated through social media campaigns or online ads. The goal is to create noise and attract more investors to the market, which can lead to a rapid price increase.
How do pump and dump systems work?
This is how it usually develops:
- Initial Promotion
: A person or group causes noise around the cryptocurrency through social media, forums and internet communities.
- Price Manipulation : Fraud artificially overestimates the price of cryptocurrency by distributing false information, creating false messages, or publishing a promotional content on different platforms.
- Increased demand : As more and more people are familiar with cryptocurrency, demand increases, increasing the price.
- Pump and Ass Cycle : The fraudster then sells its shares at an artificially inflated price and generates profits from sales.
Types of pump charts and cryptocurrency dump
There are many types of pumps in the cryptocurrency and screenshots:
- Social Media Pump : fraudsters use social media platforms to create noise around the cryptocurrency using false comments, tweets or updates on Facebook.
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- Online Advertisement : fraudsters use targeted online advertising campaigns to promote the cryptocurrency of potential investors.
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Pump and dial marks warning
Watch out for the following warning signs to avoid the occurrence of the pump and drip victim:
- Unusual or inexplicable price inflation : If the cryptocurrency price increases rapidly without a logical explanation, it can be a sign of the pump and drop.
- Mostly demand : Be careful if the demand for cryptocurrency is suddenly overwhelming, leading to an artificial price increase.
- False messages or comments in social media : be skeptical for articles or comments that seem too good (or bad) to be true.
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Protection against the pump and screenshots
If you protect yourself, follow the best exercises:
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- Information Control : Before distributing online, check information about cryptocurrency through renowned sources.
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Application
The cryptocurrency has taken a long way from the outset, but the diagrams of the pumps and drops continue to pose a serious threat to those who invest in these digital devices. You can protect yourself from becoming victims to understand the warning signs of fraud.