Pump-and-Dump Schemes Explained
In a pump-and-dump, a group inflates a token's price with coordinated buying and hype, then sells into the excitement — leaving buyers holding the loss.
How it runs
- Accumulate. Insiders buy cheaply.
- Pump. Coordinated buys and loud marketing send the price vertical.
- Dump. Insiders sell into the FOMO; the price collapses.
The tell-tale signs
- Sudden vertical spike with no real news.
- Volume wildly out of proportion to liquidity.
- Concentrated holders ready to sell.
- Coordinated shilling in a short window.
- Brand-new token with thin liquidity.
How to avoid being exit liquidity
Recognise abnormal volume-to-liquidity ratios and concentrated supply before you buy the spike.
Spot the anomaly automatically
ChainInspector Suite flags abnormal volume-to-liquidity ratios and extreme volatility, plus holder concentration — the signals that separate organic moves from manufactured pumps.
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