Honestly, I didn't understand for a long time what dumping really is and how it works in reality. I thought it was just trader slang, but it turned out that there are entire coordinated schemes of manipulation behind it.

In general, pump and dump are common methods of distorting the actual value of assets, used by groups of manipulators to make a profit at the expense of other market participants. I've seen how this happens especially often in cryptocurrencies.

The process begins with the so-called pump, which is when a coordinated group starts massively buying an asset, creating the impression of increasing demand. Information (often false) is spread through social media, talking about the supposed prospects of the coin, and naive investors start to join in, thinking they'll miss out on a chance to make money. The price skyrockets within hours or days.

But here’s where the most interesting part begins. When the price reaches its peak, the same manipulators who created the pump start urgently selling their positions. This is the dump — the moment when everything begins to collapse. Assets fall rapidly, panic spreads across the market, and people hastily get rid of their assets at any price.

I’ve seen stories of people who lost significant amounts. They bought at the peak, thinking it was just the beginning of a rise, and then everything crashed down. The dump mechanism is quite simple: create an impression of scarcity, provoke FOMO, wait for maximum interest, and then dump everything at once.

The most dangerous thing about these schemes is that they destroy trust in the market as a whole. Beginners start to fear investing, volatility skyrockets, regulators begin to intervene. But the main victims are ordinary people who just wanted to understand cryptocurrencies and make money.

To avoid falling into these traps, I try to follow simple rules. First, I never buy assets that are rising sharply without visible reasons. Second, I verify information from multiple sources and don’t believe in just one hype on social media. Third, I look at trading volumes and analyze the fundamental indicators of the asset. And most importantly, I remember that if something sounds too good to be true, it usually is a dump and pump scheme.

Knowing how dump schemes work makes you more cautious. You need to be informed and not succumb to emotions. The market is ruthless, and those who don’t learn from others’ mistakes often lose their money.