💥 What Is Token Dump Risk?
Token dump risk happens when a large holder — like a whale, early investor, or team member — suddenly sells a significant portion of their tokens, creating sharp downward pressure on the market. This can trigger panic selling and hurt smaller investors who aren’t prepared.
📌 Why it matters :
Many projects have vesting schedules or token unlocks. When these periods end, large amounts of tokens can flood the market.
Sudden dumps can wipe out short-term gains and spike volatility.
Traders and holders can watch wallet activity and unlock timelines to anticipate potential dumps.
🧠 Think of it like this :
Imagine a dam holding back water. A slow leak is fine, but if the dam bursts, a huge wave hits everyone downstream. Token dumps work the same way — they’re the “market shockwave” from big holders offloading.
💡 Key takeaway :
Token dump risk is all about timing and concentration — the bigger the holder and the more tokens unlocked, the higher the risk. Smart traders always check who holds what and when it can be sold.
🔍 In Short :
Token dump risk = big holders selling large amounts at once, potentially crashing prices and spiking market volatility.
