What Is Dump?
Also known as: Dumping, Price Dump
In short
Dump is market slang describing a cryptocurrency's price falling sharply in a short time because of heavy selling pressure; it is used as the opposite of pump, which describes a sudden rise.
Dumps can arise for different reasons: sales by whales holding large amounts of tokens, negative news, exchange hacks, new supply entering the market through token unlocks, or chain liquidations of leveraged positions are chief among them. In futures markets, long positions liquidated as the price falls generate new sell orders and can accelerate the decline.
The term is also used to describe deliberate manipulation. In pump and dump schemes, a group artificially raises the price of a low-liquidity token and sells its tokens to small investors who buy out of interest; then the price quickly collapses. Such acts are considered market fraud and a crime in many countries. In community language, a person or project team selling the tokens they hold to small investors is also described as dumping.
Sharp declines can be followed by brief recoveries, but whether these will last cannot be known in advance. In low-liquidity assets, even a single large sell order can seriously affect the price.
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