A certain cryptocurrency coin $OAX was found to be the subject of a pump and dump move that saw the coin move massively to over 80% in just a matter of seconds!
At around 2021-05-30 at 17:00, $OAX soared high reaching a 0.00001396 price point! This was in comparison to its 0.00000753 price only 12 hours ago at 7:00. The whole pump and dump took place at around 16:30:00 up to 17:00 when the stock started to fall drastically, going as low as 0.00000587 by midnight!
What is a pump and dump?
For those that don’t know what a pump and dump is, well, it is basically a way for a lot of people, or whales, that are members of a pump and dump group to make massive amounts of money in one move. This is done by having everyone buy the coin altogether and sell them at higher prices.
The thing about pump and dumps is that they rely on massive volume in order to have an impact on the price. With whales buying the pump and dump coin alongside other traders, the price of the coin would massively increase.
How did people make money off of $OAX
Profits are drawn when the traders exit the pump and dump and sell the coin at hopefully a higher price than when they bought it. There are actually premium groups online that focus on selling information regarding when the next pump and dump scheme is going to happen.
Usually, premium members of the group would get a head start before the announcement is broken out to other traders in the group. This would allow those whales to make more money out of their already enormous bet placed in the cryptocurrency.
How to lose money on pump and dumps
When looking at the Binance chart, it is quite obvious that there was a huge pump and dump indicated by the massive price spike only to fall down harder in just a couple of minutes. Pump and dumps usually last only a couple of minutes with traders having to trade by the second in order to make sure that they get sufficient profits.
It is also possible to lose from a pump and dump if the trader enters their orders late or does not sell when the prices are high. The hard part about pump and dumps is knowing when enough is enough. Sometimes, traders lose money on pump and dumps due to them believing that the price would shoot up even higher.
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