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.

Someone saw a token double within a day and shortly afterwards fall back below its starting price. Whether there was intent behind it or only market movement can only be established by examining the transactions around the peak, not by the chart alone.

Een dump die niet vanzelf ontstaat maar wordt opgezet, raakt aan wat onder beleggingsfraude wordt beschreven.

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.

Hoe herken ik een pump and dump-patroon?

Een snelle, scherpe stijging gevolgd door een even snelle daling kan opvallen. Het patroon nodigt uit tot beter kijken naar de transacties rond de top, maar is op zichzelf geen bewijs.