How to avoid getting caught in the Pump and Dump scheme

: George Solotarov; 26 October 2022; Hits: 308

The Pump and Dump strategy can be interesting from the standpoint of excitement - for people who enjoy the process itself, who are not particularly interested in losing money. If you prefer a conservative strategy, Pump and Dump is better to avoid.

How not to get into Pump and Dump:

1. Don't be in a hurry to buy on a rapid rise. Try to determine the reasons. If only a single coin is rising and there is no logical reason, it could be a Pump. A logical reason could be forks, platform updates, new partnerships with other networks, startups, or bringing institutional investors into the project.

2. Avoid coins with a "throwaway" value. Coins worth 0.0000...1 are most often the target of pampers because less money needs to be poured into them.

The cheapest and most promising cryptocurrencies

3. Take the time to react to individual statements by individuals. Or you need to react instantly, at the start of an upward movement.

4. Pay attention to volatility levels. On a pound, coins can go up 1,000% or more in a few hours. Fundamental movement rarely exceeds 20-30% per day.

5. Don't rush to invest in coins at presale that don't have a working idea and a logical roadmap. A convoluted legend, promotion of airdrop, affiliate program, bonuses - these are signs of a startup that can be used in the future for pumping and subsequent scam.

6. Analyze the volatility of the previous trend. If in the last year the coin showed 1-2% daily volatility and suddenly showed a movement of 10% or more in 24 hours in the absence of growth of volatility in the market as a whole, do not rush to buy it.

Unfortunately, it is not always possible to recognize a spike in what appears to be a natural rising price movement. But if you bought a coin at the moment of a sharp price movement, all is not yet lost.

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