Web Trader MT5
In crypto markets, a dump occurs when a large volume of selling occurs rapidly, causing the price of an asset to fall significantly in a short period. It can happen organically, with sentiment shifting suddenly.
But the term is most often used to describe deliberate or coordinated selling, most infamously in pump-and-dump schemes. Here, a group artificially inflates a token’s price through hype and coordinated buying, and then sells their holdings into the ensuing demand, leaving late buyers holding a collapsing asset.
Dumps can also happen when one big holder, sometimes known as a whale, sells a huge position into a thin market, where there isn’t enough buying activity to soak up the volume without the price falling rapidly lower.
Example: A little-known token is heavily advertised across social media over the weekend. Retail shoppers jumped in, pushing the price up 400% in 48 hours. Early holders will start selling into the enthusiasm on Monday morning.
Within hours, the price has given up most of its gains, trading volume dries up, and the late-arriving purchasers are left nursing large losses with no visible way out.
