Cryptocurrencies according to market index are one of the most volatile assets. You can sleep with a million dollar worth of crypto and wake up broke the next day. We saw this in the case of Luna crash.

You can as well wake up one day and see lots of funds in your wallet because an asset pumped or a protocol you interacted with did airdrop.

Identifying when a cryptocurrency is about to be "pumped" or "dumped" is something that seems almost impossible, as it is often the result of coordinated efforts by market participants who may not disclose their intentions. It could also be a result of a sudden news that came in tune to the hype of a token.

However, there are some signs that investors use to take note of a pending  potential pump and dump scheme. These do not apply to the hopium used in pumping memecoins and other degenerates.

Some of the indicators are: 

1. Sudden and drastic price increases or decreases: A sudden and drastic increase or decrease in the price of a cryptocurrency can be a sign of a pump and dump scheme, as market participants may be buying or selling large amounts of a coin in a short period of time.                                                                                              Listing of tokens after presale usually comes with a huge selling pressure on that token. But one would expect the token price to skyrocket because it is been listed in an exchange which always comes with a lot of hype.

2. Promotions or marketing campaigns: the market team behind a token has a lot to do with the success of the project. Quite often you will see projects postpone their launch or extend their presale period because the markets are not promoting the token to give it enough launch capital.

3. Insider trading: Insider trading is illegal and it happens when someone has non-public information and uses it to buy or sell a security.  Although illegal, that is what most whales leverage on. They have the information that is not coming to you, that is why you see them buy at discount prices and sell at a new all time high before the project dumps or rug.

4. Lack of fundamentals: Coins that are being pumped and dumped often lack strong fundamentals, such as a solid team, clear use case, and proven technology. All meme coins and most degenerates fall under this category. Liquidity will always flow to where there is utility.

5. Unusual volume: A significant increase in trading volume, especially in a short period of time, can be a sign of a pump and dump scheme. When you see sudden pump in a token's price with any news release, just search for any fundamental news you are missing or insider information.

There are trading bots that can help you access some of these information and snipe into trades for you, but with all other volatile investment, there are risks involved in using them. We have seen hacks of trading bots in the previous weeks. 

It is best to do due diligence when trading, your fundamental analysis is more important when you intend to hold a a token for a long period of time.

So that is it, with tool like www.coinmarketcal.com

You can pin upcoming events and predict what tokens they will have influence in and what their influence may lead to in such token.

Hope you learnt something today, I am ticktalker and I always post crypto/educative contents.

Please whatever is written in the article above is my for educative purposes only. I am not a financial advisor 

Be sure to follow me and turn on the notification, to see more of my articles.

Don't forget to share a tip with me below.

Ticktalker

Ciao.