Market Dump: Recognizing Crypto Sell-Offs

Dump is a sudden sale of digital assets.

What is dump?

A dump is a quick sequential sale of a significant amount of cryptocurrency, often by whale. In some cases, such sell-offs pull the price of the asset down.

This concept often goes hand in hand with pump and dump schemes, which are almost always associated with fraudulent activity and an attempt to artificially manipulate the price of cryptocurrency. A perfectly legitimate dump can also refer to a quick disposal of cryptocurrency holdings in order to make an instant profit.

The most famous example of a dump and its consequences occurred in December 2017, when Litecoin founder Charlie Lee sold his substantial LTC holdings amid fears that it amounted to a conflict of interest. At first, the markets seemed oblivious to the event. However, within days LTC dropped to the red line and lost almost half of its value. It took weeks to recover the lost value.

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