Volatility, Pump, Pump and dump
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Dark side of cryptocurrencies: Understanding the crypto volatility, pumps and landfills
The world of cryptocurrencies has increased exponentially in recent years, and prices have been abruptly and fallen with a frenetic pace. But below the surface of this digital revolution is a complex network of market dynamics, including volatility, pumps and landfill schemes.
What is volatility of cryptocurrency?
The prices of cryptocurrencies are known for extreme fluctuations, which makes them notoriously unstable. This volatility can be attributed to different factors, such as:
* Offer and demand : number of coins in circulation determines the movement of prices.
* Market Sentiment : Public opinion on cryptocurrencies, under the influence of social media, news and speculation, can stimulate prices changes.
* Regulatory environment : changes in government policies or regulations can affect prices.
* Network effects
: The more people use a certain crypto currency, the greater the value.
What are the crypto pumps?
The pump crypto refer to artificially inflated prices created by the coordinated purchase and sale of the efforts of the group of individuals. These groups often target specific crypto currencies with large prices changes with the aim of using in undoubted investors or merchants. Pumping can be done in different ways, including:
* Marketing on social networks : The influence of the Internet community promotes the crypto currency, increasing demand.
* Specialized trading platforms : Platforms offer technical indicators and tools to facilitate the purchase and sale strategy.
* Table trading : Big investors buy and hold cryptocurrencies of long periods, creating anger of shopping.
What is the crypto rejection?
Krypto rejection refers to the deliberate disposal of large quantities of cryptocurrency currency from the salesman or investor. This can be done on different means, including:
* Betting on the price of price : merchants are betting in relation to the potential price of the property, hoping to profit from its subsequent fall.
* Purchase and holding a long period : Investors buy cryptocurrency currency in the hope of selling them at a lower price before the market is corrected.
* TAX TAKE : Some individuals try to hide gains or losses by throwing their cryptocurrency stakes.
Red Flags for Crypto Investors
Before investing in a cryptic currency, it is crucial to be aware of these red flags:
* unrealistic prices
: prices that look too good (or bad) to be true can be a sign of pump or landfill.
* Excessive conditions : When prices are highly inflated and show signs of exhaustion, such as low trading quantities or weak indicators.
* Lack of Regulation : Crypto currency often lacks effective management, making them vulnerable to frauds and manipulations.
Protection of your investment
To reduce risks:
- Conduct a thorough research : Understanding Basic Technology, Cases of Use and Market Dynamics before investment.
- Diversify your portfolio : Spread investment in multiple crypto currency to reduce the exposure of instability of the prices of any property.
- Set real expectations : do not persecute hot prices or hype; Focus on basic analysis and long -term growth.
Conclusion
The cryptocurrency markets are unstable, and pumps and landfills play a significant role in their fluctuations. By understanding these concepts and cautiously, you can protect your investment and make informed decisions to participate in the cryptocurrency market.
additional resources
- National Association of Foundation for Association of Securities (ODD) Investor Education Foundation: [www.investoreducation.org] (
- Regulatory body of the financial industry (Finra): [www.finra.org] (
- Coindsk: [www.coindensk.com] (http: //www.coindsk.