A coin is said to be pumping when the price starts going up the chart with strong momentum. Pumping is driven by demand: As more and more traders come in, there is a spike in price. This is a normal rally in which one token is outperforming the rest. In other cases, artificial methods and logic is used to drive the price up. Sometimes big traders keep buying to pump and then quickly sell (dump) to make big profit. Or a few traders will conspire and pump the volume of a particular coin. This way everyone starts talking about it and this buzz can get the attention of other exchanges. It is hard to say that the price is genuinely going up or it’s some big trader’s pump-and-dump scam. So, like smart traders one should avoid chasing the market and use strategies like rupee cost averaging. This protects you from volatility and artificial pumping.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs.
