In the fast-paced world of crypto, hype often moves faster than facts. While some influencers genuinely aim to educate and inform, others use their platforms to manipulate prices for personal gain leaving everyday investors holding the bag. One of the most common tactics? The pump-and-dump scheme.
Here’s how it typically works, especially when influencers are involved:
1. Targeting a Low-Cap Coin
It starts with selecting a cryptocurrency that has a low market cap and low trading volume. These coins are easy to manipulate because even a small influx of buyers can move the price significantly.
2. Early Accumulation
Before any public mentions, the influencer or a group of insiders quietly buys large amounts of the coin at a low price. This phase is hidden from the public eye.
3. Hype Creation
Once they've loaded up, the promotion begins. The influencer starts tweeting, making YouTube videos, or posting on Telegram and Discord about how the coin is “the next 100x opportunity.” They might share flashy charts, fake news about upcoming partnerships, or even screenshots of large buys all designed to create FOMO (fear of missing out).
4. Retail Rushes In
Retail investors the public begin to buy in, often without doing their own research. As demand spikes, the coin’s price shoots up rapidly. This is the "pump" phase.
5. Dump and Disappear
While the public is buying at inflated prices, the original promoters begin selling off their holdings quietly. As they offload their positions, the price starts to crash. Within hours or days, the coin might lose 70–90% of its value.
6. Aftermath
The influencer may go silent, delete posts, or blame market volatility. Investors who bought late are left with significant losses.
Protect Yourself: Warning Signs to Watch For
Sudden, aggressive promotion by influencers you’ve never heard mention the coin before
Over-the-top promises like “100x potential” or “guaranteed gains”
Little to no information about the project’s team, technology, or use case
Low trading volume or market cap easy for whales to manipulate
Telegram or Discord groups spamming “buy now!” messages
Not every coin mentioned by influencers is a scam, but you should always do your own research. Ask yourself: What does this project really do? Who’s behind it? Does it solve a real problem? If the only selling point is hype, you might be walking into a trap.
Crypto can offer real opportunity but only if we stay informed, cautious, and skeptical of easy money promises.
Mantra's OM Token Plummets 90%, Founder Points Finger at Exchanges
Massive Pump and Sudden Dump
Pump: The price previously went as high as $9.17.
Dump: It crashed to $0.37, a drop of ~96% in a very short time.
Current recovery: It's trying to stabilize around $0.86, still far below the previous high.
Indicators of a Classic Pump-and-Dump
Sharp Vertical Candle Up & Down: This shows a sudden influx of buying (pump), followed by a massive sell-off (dump).
Volume Spike: Huge trading volume confirms whales or coordinated actors were involved.
RSI Crash to ~18: Indicates extremely oversold conditions often happens post-dump.
No Gradual Correction: Healthy corrections happen in steps. This one dropped like a rock likely not natural.
Possible Reasons (Speculative but Common in These Cases)
Influencer-led hype on social media or private groups.
Insiders or team dumped tokens after a pump.
Fake news or partnerships that were later debunked.
Low liquidity coin making it easy to manipulate.
"Rug pull" by a large wallet or team member.
What Should Investors Learn from This?
Always research tokenomics, unlock schedules, and wallet distributions.
If a coin is up 500%+ with no solid reason, stay cautious — don’t chase pumps.
Check if there’s too much hype with no fundamentals.
Beware of coins with sudden influencer interest but no dev updates or real product.