I just reviewed some price manipulation strategies in the crypto market, and pump and dump is truly one of the most common tricks that "whales" use to make profits. If you're not clear on what a pump is, basically it’s just artificially inflating the price of a coin, usually in a very short period of time.

Its operation is quite simple but effective. First, these players accumulate a large amount of coins when the price is very low, and no one pays attention. Then, they start "pumping" information, creating hype on platforms like Telegram or Facebook, stimulating FOMO among new investors. When people begin FOMOing in, the price naturally rises rapidly. That’s when the whales start selling off, making huge profits, while late buyers are left with only the option to cut losses.

I remember a typical case with TNT (Tierion) in May 2020. Its price rose from $0.05 to $0.11 in a few days, an increase of over 45%. But just 10 days later, it plummeted to $0.03, even lower than the initial price. There was no special news, just a few positive rumors on social media. That’s a classic sign of a pump strategy.

Why can a pump succeed so easily? There are a few main reasons. First, whales have enormous capital, many times larger than normal daily trading volume, giving them the power to manipulate retail investor psychology. Second, human FOMO is very strong. When they see prices rising sharply, people fear missing out, so they rush to buy without thinking. Third, the crypto market still lacks strict legal regulations like the stock market, giving whales more room to operate.

If you want to avoid this trap, remember a few things. First, always research thoroughly before investing. Learn about the team, the project, and basic information. If a coin suddenly surges in price without any real news, that’s a warning sign. Second, limit being influenced by herd mentality. You don’t always have to buy when everyone is hyping. Third, manage risks well. Determine a reasonable capital allocation and never go all-in on one coin. Finally, prioritize coins with large market caps, reputable teams, and long histories. They are less likely to be manipulated by pump schemes compared to small altcoins.

Understanding these pump tactics and tricks will help you better protect your assets. Crypto is a powerful market, but it’s also full of risks if you’re not careful.