Pump and dump
Pump and dump describes a pattern in which the price of a token rises sharply in a short time and then falls back just as quickly. The rise can be fuelled by enthusiasm, by coordinated buying, or by messages that draw attention. What the real cause is cannot be read with certainty from the pattern alone.
What it may indicate
A sharp peak followed by a deep fall can be an indication that a few parties sold at the top to those who stepped in later. It can also simply be volatility, which many tokens have anyway. The pattern in itself proves nothing; at most it is a reason to look more closely.
A dump that does not arise on its own but is set up touches on what is described under investment fraud.
What is a pump and dump?
A pattern in which a price rises sharply and then quickly falls back. The rise can come from enthusiasm, coordinated buying or attention grabbing messages.
Does the chart alone prove a pump and dump?
No. A peak and fall can also be ordinary volatility. Whether there was intent only emerges from examining the transactions around the peak.
How do I recognise a pump and dump pattern?
A quick, sharp rise followed by an equally quick fall can stand out. The pattern is a reason to look more closely at the transactions around the peak, but in itself it is not evidence.
See also
Your own situation
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