- Understand Pump and Dump Schemes: Be aware of "pump and dump" schemes, where a group artificially inflates the price of a cryptocurrency through coordinated buying, only to sell at a higher price and leave others with losses. Research and skepticism are crucial.
The only problem on detecting pump and dump scheme is how to determine someone that artificially pumping the tokens if they are doing it in coordination with different groups?
They typically do this when there’s a good news so that the pump will be associated to the news and not to the coordinated buy that happening in the background. Manipulators is already smart too on doing their so it’s better to only purchased token that you are watching for a long time.[/list]