Definition:
A dump refers to a rapid drop in the price of a coin due to irregular or unprecedented selling activity. Dumping usually occurs when an individual (or individuals) with a considerable amount of coins or tokens sells at market price (or lower) in an attempt to profit from a recent rise in price. Dumps can also occur when a large portion of current investors rapidly sell their assets due to negative sentiment.
Explanation:
Dumps are commonly (but not always) preceded by pumps; making them part of a type of price movement known as pump and dump. In this case, the price of a coin is artificially inflated by false, misleading, or exaggerated statements, resulting in increased buying activity by unsuspecting investors. Once the price has been boosted, individuals then sell a massive amount of coins or tokens, taking full advantage of the artificial price increase.
Dumps may also be the result of selling activity from a large number of investors due to negative news such as exchange hacks, scam suspicion, or false rumors.
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