TRADOOR, GRASS, JELLYMYJELLY, and RAVE had wild swings: a rapid pump followed by an extreme correction.
Many retailers only saw the green candle... but forgot to check who bought first, who sold first, and who provided exit liquidity.
The important question isn't "can it still go up?" But: who's doing the distribution now?
Smart money often moves quietly on-chain, and retailers only become aware of it when the price goes viral.
Before entering a hot token, check holder distribution, exchange inflow, abnormal volume, and price action.
What is a Pump and Dump Scheme?
Pump and Dump refers to a token's price being deliberately inflated rapidly by a specific group (whales, insiders, or a coordinated community). Then, after retail FOMO kicks in, they sell heavily, causing the price to plummet. Small tokens with low liquidity are particularly vulnerable to manipulation.
Typically occurs in tokens with:
Small market cap
Few holders
Thin liquidity
Not yet a major listing
Going viral
How to Analyze if a Token is About to Pump or Dump?
1. Check Large On-Chain Wallets
If a whale starts accumulating quietly:
The number of holders increases slowly
Top wallets buy gradually
Transfer to personal wallets, not exchanges
Buy transactions are more dominant
If a dump:
Whales send tokens to exchange/CEX wallets
Top holders start distributing
Selling volume suddenly increases
2. Check Holder Distribution
It's dangerous if:
Top 10 wallets hold >50%
One wallet holds too much
This means a single sale could be devastating.
3. Check Volume vs. Market Cap
If the market cap is small but daily volume explodes significantly, it could mean:
wash trading
fried goods
exit liquidity is being prepared
4. Check the Narrative
Pumps usually begin with:
Binance Alpha listing
futures listing rumors
shill influencers
viral memes
X/Telegram spam communities
5. Price Action
Signs of a healthy pump:
gradual rise
normal retracement
higher low
Signs of an incoming dump:
vertical candle
long upper wick
volume climax
Rising too quickly without a base
Investor Actions
Now, how do we act as an investor or trader here, because of the risk of dangerous schemes that always endanger our portfolio?
If a Trader:
Enter only during initial momentum
Use a tight stop-loss
Don't marry tokens
Take quick profit
If an Investor :
Avoid tokens like this unless you understand the risks
Wait for a major correction
Check the original utility
If You Enter Late:
Don't FOMO. Exit liquidity usually begins when new retail investors enter.
This is evidence of the Pump and Dump scheme that has occurred.
1. RaveDAO
2. TRADOOR
3. GRASS
4. Jelly-my-jelly
If you have finished reading this article, congratulations, you have built a foundation for building a portfolio and protecting your wealth.
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