Why Pumping and What To Do in the Crypto Market?

The crypto currency is really volatile and it can dump and pump just because of a fake news. An idea from a well-known expert or a celebrity can either bring it to the moon or pull it to the hell. That's why this market is considered the most volatile market ever. BUT, it is also a potential market for those who would like to get rich quick. Many crypto traders have earned millions of dollars just in a few weeks or less.

"Trading is an active style of participating in the financial markets that seeks to outperform traditional buy-and-hold investing. Rather than trying to profit from long-term uptrends in the markets, traders look for short-term price moves to profit in both rising and falling markets". In another words, it is the way traders buy and sell to gain quick profits through an exchange. Selling and buying in this industry depends very much on the analysis of information traders have. In many cases, selling and buying are following the trends. Crypto currency trading is the same.

In this article, I would like to share my experiences about the crypto market and why it is dumping and pumping. This is just my personal experiences from observation of the market over the last 2 years and it should be considered only a reference, not an advice for your investment.

Why a token is pumping?

Information is very important in this industry and whales are controlling the market too. If you have been watching the crypto market, you would have seen the price of Bitcoin up and down unpredictable. Its price has increased 17,000% since last year and dumped more than a half within few months now. As recorded by CoinDesk, its price in 2017 has roared from $997 to nearly $20,000 on 17 December 2018. However, it has dropped to $7,000 or even less this month. Frankly, noone knew why Bitcoin price surged that much but many experts believed that its price pumping came from the following reasons:
  1.  Booming of initial coin offering projects (ICO) could be the first reason. Instead of using fiat currencies to join ICO projects, all investors are requested to use Bitcoin or Ethereum to purchase their tokens. Therefore, many used fiat currencies to buy Bitcoin in order to buy tokens. This made BTC price surged.
  2. Another factor in Bitcoin's explosion in value was the announcement that Bitcoin-based derivatives will launch on two major financial exchanges — the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange CME — starting on December 10 (source).
  3. Many experts also believed on another theory that whales - who are bag holders of Bitcoin - would like to gain more profits on their Bitcoin then they created scarcity on the market in order to surge its price. Big holders are also creating a bright future for Bitcoin in short to benefit themselves.
  4. Just an old-fashioned speculation of investors and traders. They just think it is worth a lot and they are willing to pay a lot to own it. When its price is going up, many are willing to pay more just because of "FOMO".
Given the fact that no one can say firmly when the price will pump and dump. But, information and even fake news can affect the price of the whole crypto market. Celebrities play important roles in pumping and dumping a curtain tokens/ coins. John McAfee is among experts that can make some impact on a ICO project.

So, paying attention to updates and changes to your invested projects is extremely important to make sure that you can sell the right time or buy at its dip for profits if you are a trader. Many websites are updating on regular basis like CoinDesk, BitcoinNews or Cointelegraph....I would recommend you following all crypto-related websites and its telegram groups to get instant updates to support your investment. This can also help you avoid scam news or fake news from a group of investors who are trying to dump good coins to get it at dips.

What should you do when the whole market is red?

When the whole market is turning red or likely dumping, many will panic selling at once to stop loss. Most of them are newbies and inexperienced in trading in the crypto market. The dumping can be played by whales or bag holders in order to collect your tokens at cheaper price. Sometimes, it dumps because of the market correction. If this is the case, it will pump in a short time, then holding is the key to success. Read more about what to do when the market is dumping to have more information.

As advised by many expert like John McAfee, panic selling is loosing while holding is not. That's right as you can still get your investment back when its is recovered. Therefore, you need to be patient with a strong heart, you will be fine.

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