Cryptocurrency Dumping: Analyzing Market Manipulation
Dumping is a collective market sell-off that occurs when a large amount of a particular cryptocurrency is sold in a short period of time.
What is Dumping?
Dumping can occur if the market is affected by external factors, such as economic turmoil in global markets, or even as a reaction to specific news. Over the past few years, such examples have been the result of several factors. On the rare occasions when bitcoin approaches a double-digit decline, the market can experience severe volatility, which is traditionally the trigger for a reset.
For example, take May 2018, in which bitcoin experienced a period of active upward movement that saw it surpass the meaningful $10,000 figure. It oscillated again and again around the $10,100 mark and eventually approached $10,200 before hitting a hard ceiling of resistance.
At this point, cryptokits – players with unusually large amounts of coins – initiated a sell-off just below the $10,000 mark. As a result, the value of the world’s most famous cryptocurrency fell in a matter of minutes.
Most likely, these whales then re-entered the market to buy up even more bitcoins at the drastically lower price, resulting in a huge profit.