"crypto crash: pump and dump strategies that are exposed by continuation pattern"
The cryptocurrency market has carried out a roller coaster ride in the past few months, with the prices between ups and downs. Due to pump and dump systems, many investors have lost considerable amounts of money in which fraudsters artificially impose the price of a coin on before they are sold to unsuspecting buyers.
However, not all cryptocurrencies are equally susceptible to this type of fraud. Those who have certain patterns can be identified as safer and less susceptible to manipulation. In this article we will examine two key concepts in the cryptocurrency trade: continuation pattern and pump and dump strategies.
Supplementary pattern
The continuation patterns relate to a certain type of technical analysis that is used on cryptocurrency markets. It includes the identification of prices that can be used to predict future price movements. These patterns can be based on various indicators, such as: B. movable average values, RSI or Bollinger tapes.
If a continuation pattern is identified, it is often seen as a clear indication that the price moves further in one direction or another. For example, if a coin acts in a downward trend and then breaks out of the support level, this can indicate that it becomes lower. If, conversely, a coin acts in an upward trend and breaks out above the level of resistance, this can be indicated that it continues to be higher.
Pumping strategies and dumpel
Pump and dump strategies artificially include the price of cryptocurrency by spreading incorrect or misleading information about their potential value. This can include that exaggerated claims about the technology team, the development team or the market potential of the coin claim. As soon as the price has been artificially inflated, fraudsters can sell the coin at a high price, which means that the price drops significantly.
Pump and dump schemes are often used in connection with continuation patterns, since they can be interpreted in such a way that they coincide with a specific pattern. For example, if a cryptocurrency has a strong continuation pattern, it is more likely that pump and dump schemes take this opportunity to artificially increase the price.
Identifying pump and dump strategies
How do you identify pump and dump strategies? Here are some tips:
- Be careful with unusually fast price movements : If the prices move too quickly, this can be a sign that someone tries to manipulate them.
- Observe confirmation patterns : Fraudsters often use confirmation patterns to validate their claims about the potential value of the coin. Find indicators such as fake whale activities or mass orders.
- Search for feelings of market : Pay attention to changes in the mood, especially if you become too positive or negative.
Diploma
While pump and dump strategies are an important problem on cryptocurrency markets, continuation patterns can be used to identify them. By identifying these patterns and carefully caring with unusually fast price movements, you can reduce your risk and make more well -founded investment decisions.
It is also worth noting that the decentralized exchange (Dexs) and other cryptocurrencies are becoming increasingly popular, which makes it easier for fraudsters to work undiscovered. As a result, it is important to stay vigilant and carry out your research before investing in a cryptocurrency.
Liability exclusion
This article is not intended as investment advice. Cryptocurrency markets can be very volatile, and the performance in the past is no indication of future results. Always carry out thorough research and consult experts before making investment decisions.